Originally Posted by
MickG0105
Baited?!
As Green.Dot noted at
#997 Virgin had released $39 MEL-SYD fares yesterday, well before Sharp's media run this morning.
And spare a thought for the financial mechanics of what's going on here. There is a marked difference financially between an airline with 80-odd percent load factors offering $39 fares and an airline with sub-30 percent load factors offering them.
The mechanics are very different as you point out. VA can sell 10 $39 seats that they would have previously sold as Velocity reward seats and actually be better off financially and still have an average seat price across the plane of, say, $175 and have successfully diverted 10 pax away from REX. REX are unable to sell 20 seats on a flight when they are only charging $69. Even if they double their seats sold to 40 @ $39, they are only clearing $9 per pax once airport and gov't charges are included so that is a whole $360 for themselves for the whole flight....hardly a recipe for success.