Perth airfares on the rise

Airfares on key international business routes from Perth continue to rise, according to a new report, while Virgin Australia has today unveiled plans to start direct flights between Western Australia and Tasmania later this year.

CWT Solutions Group and Centre for Aviation’s (CAPA) 'Business Travel Pulse' report found that flight fares between Perth and locations such as Singapore, San Francisco and Houston had risen more than 5 per cent in the first quarter of 2018.

Economy airfares to London also increased more than 5 per cent, while business class flights were up between 1 and 5 per cent.

On the domestic front, economy flight fares to Sydney and Melbourne had decreased between 1 and 5 per cent, although business class airfares to those locations had both increased.

Average ticket prices had also increased for flights between Perth and Brisbane.

CAPA executive chairman Peter Harbison said several factors were causing the price hikes.

“It’s clear that the impact of higher fuel input costs this year is steadily exerting upwards pressure on fares, although the dynamic link with capacity complicates that judgment,” he said.

“Capacity is trending down, which, assuming reasonable demand as the local economy recovers, would also generally have a tendency to encourage prices up.

“With two thirds of Perth’s system seats being domestic, it’s relevant that competitive tensions have reduced domestically over the past couple of years – the only exceptions being in the Sydney and Melbourne economy segments.”

The report also revealed a 2.1 per cent decline in the hotel occupancy rate in Perth to 76.5 per cent from last year.

This translated into a $10 reduction in the average daily hotel rate to $196.

“It continues to be a buyer’s market in Perth,” CWT director Richard Johnson said.

“There has been a substantial increase in room capacity over the past few years, with many new hotels still in the pipeline.

“Meanwhile, corporate travel demand hasn’t fully recovered following the downturn in the oil, gas and mining sectors.

“That said, the demand picture looks set to change, with commodity prices on the rise and the related industries poised for recovery.

“The positioning of Perth as a western hub with the introduction of routes like Qantas’s non-stop service to London is also expected to boost demand.”

Meanwhile, Virgin today announced a direct route between Perth and Hobart, which will begin operating in Septmeber this year.

The flight will operate three times a week (Mondays, Wednesdays and Fridays).

Currently, flights between WA and Tasmania have to connect to flights to and from Melbourne, Sydney or Adelaide.

Acting Tourism Minister Bill Johnston said the new route would provide a boost for domestic tourism, while Australian Hotels Association chief executive Steve Old welcomed the news.