Wirraway
13th Dec 2004, 16:00
Tues "The Australian"
Local fares take off as year ends
Steve Creedy, Aviation writer
December 14, 2004
BUSINESS and full economy airfares from Australia rose at twice the regional average in the closing months of the year as airlines tried to boost yields and corporate travellers faced their fourth consecutive quarterly price rise.
The increases, outlined in the latest American Express Asia-Pacific airfare index, meant Australians faced the highest annual fare rises of any monitored Asia-Pacific market, except Malaysia.
Year-on-year figures showed business class airfares rose 6 per cent compared with the same time last year, full economy prices 3.7 per cent and discount economy tickets 6.3 per cent.
The Australian rises contrasted sharply with New Zealand, where business class and discount economy fares were lower than last year and full economy rose just 1 per cent.
The index showed fourth-quarter business fares from Australia rose by 2.4 per cent but averaged only 1.3 per cent for the region.
Full economy fares from Australia rose 2.9 per cent for the quarter – also second to Malaysia – compared with a regional rise of 1.3 per cent.
But Australian first-class travellers escaped the big rises, registering an increase of just 0.6 per cent for the quarter and 2.6 per cent for the year.
While high fuel prices continued to play a major role in fare rises across the region, Amex suggested the bigger than average increases for Australia were a result of airlines raising fares to improve margins.
"In the past we have found that when Australian airline yields are under pressure and falling, their airfare prices in certain categories, particularly business class and full economy class, rise," said Amex head of Japanese, Asia-Pacific and Australian consulting services, Robert Tedesco. "This may account for the stronger increase in business and full economy airfares in Australia than the majority of the region."
Mr Tedesco said many airlines in the region had announced temporary fuel surcharges in recent months and some had incorporated higher fuel costs into their airfares.
"Separately, the disparity between changes in business-type fares and leisure fares remains a continuing trend of the air fare index," he said. "This is more reflective of a leisure traveller's capacity to alter behaviour than the absence of competition.
"As such, the gulf between these fares will continue to widen as long as the majority of businesses favour a conservative policy in relation to fare and carrier selection."
A small sampling by Amex of Australian domestic fares showed year-on-year increases of 4.4 per cent in business class, 4.1 per cent in full economy and 11.3 per cent in discount economy.
* Transport Department figures show 10 years of growth at Australia's bigger airports. Brisbane topped the list in percentage terms with total average annual passenger growth of 6.3 per cent, followed by Perth (5.6 per cent) and Melbourne (5.5 per cent).
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Tues "The Australian"
Rising passenger load boosts Qantas shares
Steve Creedy, Aviation
December 14, 2004
QANTAS shares continued to rise yesterday in the wake of encouraging October traffic data, as the airline announced it was adding accounting veteran Garry Hounsell to its board.
Qantas shares rose 6c to $3.63 after analysts welcomed figures showing stronger loads - the percentage of seats filled by paying passengers -- at low-cost offshoots Jetstar and Australian. There was also a small increase in domestic passenger loads to 82.7 per cent.
International passenger loads fell 2.3 points to 75.6 per cent as an 8.8 per cent growth in traffic failed to match a 13 per cent increase in capacity.
But analysts noted international yield - the return per seat - for the year was up 4.2 per cent.
Citigroup Smith Barney transport analyst Jason Smith said in a note that international yield growth was ahead of forecasts and attributed it to the airline\'s "skybed" sleeper seats, recent fare rises and greater international corporate demand.
Mr Smith said a decline in domestic yield appeared to be stabilising and he continued to rate Qantas "as one of the most attractive airlines globally".
He noted Qantas was trading on price-earnings ratio of eight times its 2004-05 earnings forecast, offered a 5 per cent dividend yield, had a strong cash flow and, if fuel costs were excluded, falling unit costs.
The carrier\'s net profit was also likely to benefit from movements in the Australian dollar as it was the second-best hedged airline after Southwest.
Other analysts said the figures were in line with expectations and retained existing recommendations. Goldman Sachs JBWere said the earnings momentum in the domestic business were still solid but warned international loads remained below its 2005 financial year assumptions and represented a risk to consensus forecasts.
Mr Hounsell, a former managing partner with Arthur Andersens and a senior partner with Ernst & Young, joins the Qantas board as an independent non-executive director from January 1.
The Qantas-managed low-cost carrier Jetstar Asia yesterday made its first flight from Singapore as it joined battle with other Asian discount carriers.
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Local fares take off as year ends
Steve Creedy, Aviation writer
December 14, 2004
BUSINESS and full economy airfares from Australia rose at twice the regional average in the closing months of the year as airlines tried to boost yields and corporate travellers faced their fourth consecutive quarterly price rise.
The increases, outlined in the latest American Express Asia-Pacific airfare index, meant Australians faced the highest annual fare rises of any monitored Asia-Pacific market, except Malaysia.
Year-on-year figures showed business class airfares rose 6 per cent compared with the same time last year, full economy prices 3.7 per cent and discount economy tickets 6.3 per cent.
The Australian rises contrasted sharply with New Zealand, where business class and discount economy fares were lower than last year and full economy rose just 1 per cent.
The index showed fourth-quarter business fares from Australia rose by 2.4 per cent but averaged only 1.3 per cent for the region.
Full economy fares from Australia rose 2.9 per cent for the quarter – also second to Malaysia – compared with a regional rise of 1.3 per cent.
But Australian first-class travellers escaped the big rises, registering an increase of just 0.6 per cent for the quarter and 2.6 per cent for the year.
While high fuel prices continued to play a major role in fare rises across the region, Amex suggested the bigger than average increases for Australia were a result of airlines raising fares to improve margins.
"In the past we have found that when Australian airline yields are under pressure and falling, their airfare prices in certain categories, particularly business class and full economy class, rise," said Amex head of Japanese, Asia-Pacific and Australian consulting services, Robert Tedesco. "This may account for the stronger increase in business and full economy airfares in Australia than the majority of the region."
Mr Tedesco said many airlines in the region had announced temporary fuel surcharges in recent months and some had incorporated higher fuel costs into their airfares.
"Separately, the disparity between changes in business-type fares and leisure fares remains a continuing trend of the air fare index," he said. "This is more reflective of a leisure traveller's capacity to alter behaviour than the absence of competition.
"As such, the gulf between these fares will continue to widen as long as the majority of businesses favour a conservative policy in relation to fare and carrier selection."
A small sampling by Amex of Australian domestic fares showed year-on-year increases of 4.4 per cent in business class, 4.1 per cent in full economy and 11.3 per cent in discount economy.
* Transport Department figures show 10 years of growth at Australia's bigger airports. Brisbane topped the list in percentage terms with total average annual passenger growth of 6.3 per cent, followed by Perth (5.6 per cent) and Melbourne (5.5 per cent).
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Tues "The Australian"
Rising passenger load boosts Qantas shares
Steve Creedy, Aviation
December 14, 2004
QANTAS shares continued to rise yesterday in the wake of encouraging October traffic data, as the airline announced it was adding accounting veteran Garry Hounsell to its board.
Qantas shares rose 6c to $3.63 after analysts welcomed figures showing stronger loads - the percentage of seats filled by paying passengers -- at low-cost offshoots Jetstar and Australian. There was also a small increase in domestic passenger loads to 82.7 per cent.
International passenger loads fell 2.3 points to 75.6 per cent as an 8.8 per cent growth in traffic failed to match a 13 per cent increase in capacity.
But analysts noted international yield - the return per seat - for the year was up 4.2 per cent.
Citigroup Smith Barney transport analyst Jason Smith said in a note that international yield growth was ahead of forecasts and attributed it to the airline\'s "skybed" sleeper seats, recent fare rises and greater international corporate demand.
Mr Smith said a decline in domestic yield appeared to be stabilising and he continued to rate Qantas "as one of the most attractive airlines globally".
He noted Qantas was trading on price-earnings ratio of eight times its 2004-05 earnings forecast, offered a 5 per cent dividend yield, had a strong cash flow and, if fuel costs were excluded, falling unit costs.
The carrier\'s net profit was also likely to benefit from movements in the Australian dollar as it was the second-best hedged airline after Southwest.
Other analysts said the figures were in line with expectations and retained existing recommendations. Goldman Sachs JBWere said the earnings momentum in the domestic business were still solid but warned international loads remained below its 2005 financial year assumptions and represented a risk to consensus forecasts.
Mr Hounsell, a former managing partner with Arthur Andersens and a senior partner with Ernst & Young, joins the Qantas board as an independent non-executive director from January 1.
The Qantas-managed low-cost carrier Jetstar Asia yesterday made its first flight from Singapore as it joined battle with other Asian discount carriers.
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