Jetstar to sell five cent airfares
Join Date: Mar 2007
Location: The Asylum
Posts: 38
Likes: 0
Received 0 Likes
on
0 Posts
Clever marketing if you ask me. 5000 5c fares is nothing on routes where the seats normally go empty. These fares were only available if you were a jetmail subscriber.
I would say now after 60 mill hits, they now have a sh1tload of new jetmail subscribers that they can peddle their deals to. Cheaper advertising will offset the losses on the 5c fares.
I would say now after 60 mill hits, they now have a sh1tload of new jetmail subscribers that they can peddle their deals to. Cheaper advertising will offset the losses on the 5c fares.
Join Date: Mar 2006
Location: Melbourne
Posts: 472
Likes: 0
Received 0 Likes
on
0 Posts
It's only clever marketing if profits go up. The resentment that most of the "e-mail subscribers" have felt when failing to get onto the website works against the original purpose. I actually got onto the website , but having selected my dates, got bumped off several times. So, I gave up. Being one way, I would have had a half price fare, but as there are many other costs incurred when travelling, the saving is small anyway.
Jetstar offers "no frills" cheap fares when you book early and travel in low season periods, which I do.
As for them making a profit when Tiger gets into full swing........... that WILL be interesting.
The new e-mail subscribers that were disappointed will think again before wasting their time trying to book "Sale" fares with Jetstar.
"no frills" fares also means "no frills infrastructure" which translates to low capacity servers,inadequate websites and low level quality assurance.
Jetstar offers "no frills" cheap fares when you book early and travel in low season periods, which I do.
As for them making a profit when Tiger gets into full swing........... that WILL be interesting.
The new e-mail subscribers that were disappointed will think again before wasting their time trying to book "Sale" fares with Jetstar.
"no frills" fares also means "no frills infrastructure" which translates to low capacity servers,inadequate websites and low level quality assurance.
Moderator
I wonder whether the authorities will look at the obvious predatory pricing practices of Jet*'s 5 cent offer?
Now, how do we get a little more competition into the fuel retail and banking industries????
Now, how do we get a little more competition into the fuel retail and banking industries????
Nunc est bibendum
Joyce reckons they're only losing $20-30 on each ticket.
Isn't the J* seat cost per ASK something like 7.9 cents?
My great circle tracker shows it's about 822km SYD-MEL. That means that the 'cost' of each seat is about $65. I guess once you take out the QF subsidy then they probably are only losing $20-30. At least I now know how much QF is subsidising J* for!
Isn't the J* seat cost per ASK something like 7.9 cents?
My great circle tracker shows it's about 822km SYD-MEL. That means that the 'cost' of each seat is about $65. I guess once you take out the QF subsidy then they probably are only losing $20-30. At least I now know how much QF is subsidising J* for!
Join Date: Jul 2007
Location: Australia
Age: 74
Posts: 221
Likes: 0
Received 0 Likes
on
0 Posts
Keg
For most of my long but not so distinguished career the great circle distance SYD-MEL was 707 km. What happened? Or where you looking at the longest SID-longest STAR air route?
That aside.....do not rely too much on what is a simplistic (no disrespect) piece of arithmetic...even assuming your cost/ASK is correct, you can't draw inferences on subsidies, losses etc from any of this, sorry.
If I get some time I would be happy to write more on this and may well do so. It would be a good thread starter and might encourage a few others who have made their living in this form of analysis to contribute. The analysis would cover price elasticities in each of the market segments, behaviour of the fixed/variable cost mix by route and utilization, transfer pricing mechanisms, cash flow vs accrual accounting, reaction to competitors' strategies, "whole of group" competitive strategies, short and long-run average and marginal cost curves, yield management strategies for the route, company and "whole of group", predatory pricing and capacity management issues, yield mix down the aisles of the aircraft, cost of brand building, building a marketing database, history lessons from European and US "fare wars", building loyalty mechanisms, capacity constraints at key airports, labour cost and flexibility, costs of different types (by seat, trip, route, life), ratio analysis (revenue per seat in the air, revenue per employee, aircraft utilization etc etc) and lots more......
Anyone else who thinks a "real world" (vs Business School) thread on airline economics and marketing would be useful...put your hand up. It could be interesting to sort out some wooly thinking and educate ourselves.
For most of my long but not so distinguished career the great circle distance SYD-MEL was 707 km. What happened? Or where you looking at the longest SID-longest STAR air route?
That aside.....do not rely too much on what is a simplistic (no disrespect) piece of arithmetic...even assuming your cost/ASK is correct, you can't draw inferences on subsidies, losses etc from any of this, sorry.
If I get some time I would be happy to write more on this and may well do so. It would be a good thread starter and might encourage a few others who have made their living in this form of analysis to contribute. The analysis would cover price elasticities in each of the market segments, behaviour of the fixed/variable cost mix by route and utilization, transfer pricing mechanisms, cash flow vs accrual accounting, reaction to competitors' strategies, "whole of group" competitive strategies, short and long-run average and marginal cost curves, yield management strategies for the route, company and "whole of group", predatory pricing and capacity management issues, yield mix down the aisles of the aircraft, cost of brand building, building a marketing database, history lessons from European and US "fare wars", building loyalty mechanisms, capacity constraints at key airports, labour cost and flexibility, costs of different types (by seat, trip, route, life), ratio analysis (revenue per seat in the air, revenue per employee, aircraft utilization etc etc) and lots more......
Anyone else who thinks a "real world" (vs Business School) thread on airline economics and marketing would be useful...put your hand up. It could be interesting to sort out some wooly thinking and educate ourselves.
Join Date: Sep 2001
Location: Over the Rainbow
Posts: 83
Likes: 0
Received 0 Likes
on
0 Posts
You get what you pay for
I didn't get an email from Jet Star until 7:24pm that day. By that time I'm guessing everything was sold out. I think I'll fly Qantas, Virgin or myself.
Join Date: Sep 2005
Location: NZWN New Zealand
Posts: 298
Likes: 0
Received 0 Likes
on
0 Posts
Not from an airline perspective but rather from a commercial perspective when does all this stuff become unfair trade practice or restraint of trade ?
Any clown can sell seats for less than they're worth, but it damages the overall industry.
A dominant airline who uses other routes to support unsustainable fares to maintain a monopoly situation must surely be in breach of commerce laws preventing trade monopolies.
As a non Ozzie, why is the OZ Government looking the other way and why are there no complaints by other players in the industry ?
Any clown can sell seats for less than they're worth, but it damages the overall industry.
A dominant airline who uses other routes to support unsustainable fares to maintain a monopoly situation must surely be in breach of commerce laws preventing trade monopolies.
As a non Ozzie, why is the OZ Government looking the other way and why are there no complaints by other players in the industry ?
Join Date: Aug 2002
Location: On a Ship Near You
Posts: 787
Likes: 0
Received 0 Likes
on
0 Posts
How many seats per sector?
My very rough calculations give no more than 4 seats per sector (maximum) on offer; so 4 seats at 5 cents and the others a normal prices. Very clever.
Not so clever, not setting up their system to cope and not a very clever way of making people search for the flights; which in itself made the system slower.
The other minor problem they 'created' was anyone getting a single one way fare has just turned around and purchase a Tiger return leg; where it's an option. So in effect these 5 cents fares may have helped Tiger, not pulled the wind out of their sails (sales). Well that's what happened in my family.
Not so clever, not setting up their system to cope and not a very clever way of making people search for the flights; which in itself made the system slower.
The other minor problem they 'created' was anyone getting a single one way fare has just turned around and purchase a Tiger return leg; where it's an option. So in effect these 5 cents fares may have helped Tiger, not pulled the wind out of their sails (sales). Well that's what happened in my family.
Registered User **
Join Date: May 2005
Location: The Ultimate Crew Rest....
Age: 69
Posts: 2,346
Likes: 0
Received 0 Likes
on
0 Posts
You don't need a degree to understand that it will cost a lot more than 5 cents to fly on these sectors.
Whatever the seat/km cost is it is a heck of a lot more than 5 cents.
Add to that the cost of the various taxes which we all normally pay and someone is subsidising the cheap fares and to a considerable amount.
Whatever the seat/km cost is it is a heck of a lot more than 5 cents.
Add to that the cost of the various taxes which we all normally pay and someone is subsidising the cheap fares and to a considerable amount.
Join Date: Aug 2007
Location: Australia
Posts: 71
Likes: 0
Received 0 Likes
on
0 Posts
So does anyone actually know anybody that got a 5c fare? Just JQ freinds n family maybe?
I managed after many attempts, to get a return trip for 3 people for 30 cents in total
I managed after many attempts, to get a return trip for 3 people for 30 cents in total
Join Date: May 2005
Location: Australia
Posts: 6
Likes: 0
Received 0 Likes
on
0 Posts
J* 5c fares
For those who are asking - I managed to get 2 return seats, Melb - Laun, travelling next July. At 5c each, plus $2 per seat if paying by credit card (how else do you pay?), the total cost for me was $8.20. It took a few tries to get to the end of the booking process as it kept timing out, but in the end it only took 10 min of my time. Not bad really. 
Join Date: Aug 2005
Location: PPrune nominee 2011!
Posts: 1,561
Likes: 0
Received 0 Likes
on
0 Posts
You don't need a degree to understand that it will cost a lot more than 5 cents to fly on these sectors.
Whatever the seat/km cost is it is a heck of a lot more than 5 cents.
Add to that the cost of the various taxes which we all normally pay and someone is subsidising the cheap fares and to a considerable amount.
Whatever the seat/km cost is it is a heck of a lot more than 5 cents.
Add to that the cost of the various taxes which we all normally pay and someone is subsidising the cheap fares and to a considerable amount.
"Wouldnt have thought it was heck of alot more"
Obvious you need to understand the financial operations on how it really works....
