Inquiry into airfares in WA
Thread Starter
Inquiry into airfares in WA
From "The Australian" a short while ago.
Inquiry begins into high WA plane fares
Australian Associated Press
11:17AM June 20, 2017
A parliamentary inquiry into the high prices of regional airfares in Western Australia will be carried out, amid long-held complaints that it costs more to fly within the state than to the east coast.
The Economics and Industry Standing Committee will report on what is contributing to the current high cost of regional airfares and the impact that has on the regions from a business, tourism and social perspective.
"A parliamentary inquiry has the power to shine a spotlight on this issue, get to the bottom of why these fares are so expensive and give airlines the opportunity to provide solutions," Tourism Minister Paul Papalia said.
Australian Associated Press
11:17AM June 20, 2017
A parliamentary inquiry into the high prices of regional airfares in Western Australia will be carried out, amid long-held complaints that it costs more to fly within the state than to the east coast.
The Economics and Industry Standing Committee will report on what is contributing to the current high cost of regional airfares and the impact that has on the regions from a business, tourism and social perspective.
"A parliamentary inquiry has the power to shine a spotlight on this issue, get to the bottom of why these fares are so expensive and give airlines the opportunity to provide solutions," Tourism Minister Paul Papalia said.
When it costs more to catch a cab to the airport than it does for a flight it distorts the perception of the average punter.
The cost of airfares in WA would, I suggest, be reflective of the cost of production rather than be indicative of any attempt by either of the two major airlines to rip off the travelling public in WA.
You only need to look at the dismal performance of both carriers - one more dismal than the other - and you can easily see that they are not charging what they need to charge to cover their costs and make a proper return on invested capital.
I doubt though that this would be a prevailing review of any parliamentary inquiry who are just there to grand stand and beat their own chests.
The cost of airfares in WA would, I suggest, be reflective of the cost of production rather than be indicative of any attempt by either of the two major airlines to rip off the travelling public in WA.
You only need to look at the dismal performance of both carriers - one more dismal than the other - and you can easily see that they are not charging what they need to charge to cover their costs and make a proper return on invested capital.
I doubt though that this would be a prevailing review of any parliamentary inquiry who are just there to grand stand and beat their own chests.
Which begs the question ...
Primarily there are only QF and VA plus their fully owned LCC divisions
So on that "duopoly based structure" why are they both not charging reasonable fares on domestic operations
Understandably there is more competition on international sectors, but even many that VA operate have little aggressive competition
Imagine if you will, a true LCC setting up here in Oz and what it would do to VA
Likely the same as what VA, Compass and Impulse did to Ansett
Without going down the road of colluding or price fixing, little would need to be done to have a strong domestic duopoly
Say VA with their fleet of 110 odd frames added just $2 per domestic sector
110 frames
100 pax average (probably higher as most are 180+ seats)
5 sectors per day
365 days per year
$20 million per year
Or add $5 and it's $50 million
This would go an awful long way to getting them into the black
Primarily there are only QF and VA plus their fully owned LCC divisions
So on that "duopoly based structure" why are they both not charging reasonable fares on domestic operations
Understandably there is more competition on international sectors, but even many that VA operate have little aggressive competition
Imagine if you will, a true LCC setting up here in Oz and what it would do to VA
Likely the same as what VA, Compass and Impulse did to Ansett
Without going down the road of colluding or price fixing, little would need to be done to have a strong domestic duopoly
Say VA with their fleet of 110 odd frames added just $2 per domestic sector
110 frames
100 pax average (probably higher as most are 180+ seats)
5 sectors per day
365 days per year
$20 million per year
Or add $5 and it's $50 million
This would go an awful long way to getting them into the black
Which begs the question ...
Primarily there are only QF and VA plus their fully owned LCC divisions
So on that "duopoly based structure" why are they both not charging reasonable fares on domestic operations
Understandably there is more competition on international sectors, but even many that VA operate have little aggressive competition
Imagine if you will, a true LCC setting up here in Oz and what it would do to VA
Likely the same as what VA, Compass and Impulse did to Ansett
Without going down the road of colluding or price fixing, little would need to be done to have a strong domestic duopoly
Say VA with their fleet of 110 odd frames added just $2 per domestic sector
110 frames
100 pax average (probably higher as most are 180+ seats)
5 sectors per day
365 days per year
$20 million per year
Or add $5 and it's $50 million
This would go an awful long way to getting them into the black
Primarily there are only QF and VA plus their fully owned LCC divisions
So on that "duopoly based structure" why are they both not charging reasonable fares on domestic operations
Understandably there is more competition on international sectors, but even many that VA operate have little aggressive competition
Imagine if you will, a true LCC setting up here in Oz and what it would do to VA
Likely the same as what VA, Compass and Impulse did to Ansett
Without going down the road of colluding or price fixing, little would need to be done to have a strong domestic duopoly
Say VA with their fleet of 110 odd frames added just $2 per domestic sector
110 frames
100 pax average (probably higher as most are 180+ seats)
5 sectors per day
365 days per year
$20 million per year
Or add $5 and it's $50 million
This would go an awful long way to getting them into the black
Thread Starter
Say VA with their fleet of 110 odd frames added just $2 per domestic sector
110 frames
100 pax average (probably higher as most are 180+ seats)
5 sectors per day
365 days per year
$20 million per year
Or add $5 and it's $50 million
This would go an awful long way to getting them into the black
110 frames
100 pax average (probably higher as most are 180+ seats)
5 sectors per day
365 days per year
$20 million per year
Or add $5 and it's $50 million
This would go an awful long way to getting them into the black
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A guy recently came into my store and told me about his recent trip to Broome and how quiet town was. After serving him it was a bit quiet with the cooler weather and I looked into it.
The fee's charged with the following information loads : LW 66T 170pax (incl 20 Children) Arriving and Departing. Passengers last year DOM
Broome $10 329.90
308 856 pax last year
Alice Springs $9472.46
602 865 pax last year
Cairns $6205.68
4 100 948 pax last year
Acknowledgement the difference in passenger figures but sorting out these fee's may well see more airlines on more routes being able to reinvigorate towns.
The fee's charged with the following information loads : LW 66T 170pax (incl 20 Children) Arriving and Departing. Passengers last year DOM
Broome $10 329.90
308 856 pax last year
Alice Springs $9472.46
602 865 pax last year
Cairns $6205.68
4 100 948 pax last year
Acknowledgement the difference in passenger figures but sorting out these fee's may well see more airlines on more routes being able to reinvigorate towns.
Last edited by GoldCoastTobacconist; 20th Jun 2017 at 09:08. Reason: Clarification
'Regional' flights 'within' WA is the basis of the enquiry, I think.
i.e. It can cost 'an arm' for a flight to Albany, Esperance, Kal or Broome at, say, Easter, than a week prior to or after......
Why? That is the question.
You may quote 'supply and demand' - but - there is something just not quite 'right' at times....
No cheers, Nope, None at all.....
i.e. It can cost 'an arm' for a flight to Albany, Esperance, Kal or Broome at, say, Easter, than a week prior to or after......
Why? That is the question.
You may quote 'supply and demand' - but - there is something just not quite 'right' at times....
No cheers, Nope, None at all.....
'Regional' flights 'within' WA is the basis of the enquiry, I think.
i.e. It can cost 'an arm' for a flight to Albany, Esperance, Kal or Broome at, say, Easter, than a week prior to or after......
Why? That is the question.
You may quote 'supply and demand' - but - there is something just not quite 'right' at times....
No cheers, Nope, None at all.....
i.e. It can cost 'an arm' for a flight to Albany, Esperance, Kal or Broome at, say, Easter, than a week prior to or after......
Why? That is the question.
You may quote 'supply and demand' - but - there is something just not quite 'right' at times....
No cheers, Nope, None at all.....
In WA if you are going to fly, the airline knows the cost is somewhat irrelevant as you have limited options
Same as regional NSW and QLD
East Coast and trunk routes have the volume to support LCCs that are there primarily to stave off foreign or new entities entering the market and hurting VA and QF, so there is some downward price pressure on these routes
There simply is not enough volume on WA regional routes from "walk up" passengers to sustain a Jetstar or Tiger or a new start up from jumping in
Keep in mind most of the routes and frequencies are only there because of the mining companies filling a majority of the seats (likely at those super discounted fares you allude to) and the few seats that are left over are sold on to the mug punter at what ever price they desire
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A guy recently came into my store and told me about his recent trip to Broome and how quiet town was. After serving him it was a bit quiet with the cooler weather and I looked into it.
The fee's charged with the following information loads : LW 66T 170pax (incl 20 Children) Arriving and Departing. Passengers last year DOM
Broome $10 329.90
308 856 pax last year
Alice Springs $9472.46
602 865 pax last year
Cairns $6205.68
4 100 948 pax last year
Acknowledgement the difference in passenger figures but sorting out these fee's may well see more airlines on more routes being able to reinvigorate towns.
The fee's charged with the following information loads : LW 66T 170pax (incl 20 Children) Arriving and Departing. Passengers last year DOM
Broome $10 329.90
308 856 pax last year
Alice Springs $9472.46
602 865 pax last year
Cairns $6205.68
4 100 948 pax last year
Acknowledgement the difference in passenger figures but sorting out these fee's may well see more airlines on more routes being able to reinvigorate towns.
A lot of trying to shift the blame.
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In the interest of fairness I did a fare scrape after I wrote this. More like $800 Broome dct Melbourne and between $180 and $350 for Cairns dct Melbourne on a random day outside school holidays.
When it's $2 per km in the cab to the airport but circa 20 cents per km in the aeroplane (which is completely user pays unlike the cab) I think they are investigating the wrong form of transport.
Then there's the absolutely stupid airport charges in this country.........
Then there's the absolutely stupid airport charges in this country.........
Melbourne to Carins
5 Direct flights per week across all major carriers + all the indirect flights
If you want to compare Broome to Melbourne better to compare it with a similar route such as Brisbane to Mount Isa
Brisbane to Mount Isa, there's another hugely ripped off route.
I have lived in Mount Isa and I continue to have housing interests in Mount Isa, and I can tell you now that if it were an in demand route, then Qantas wouldn't be cutting flights and downsizing the aircraft. So you can't tell me that it's so flippin' expensive to fly that route simply because of supply and demand.
$2,000+ return for a family of 2 adults and a child with over 6 months lead time 😡.
Go on, keep telling me that's fair when I could pay a shedload less for a longer flight to other parts of the country, or even the world.
Not everyone in those parts of the country earn mining salaries.
morno
I have lived in Mount Isa and I continue to have housing interests in Mount Isa, and I can tell you now that if it were an in demand route, then Qantas wouldn't be cutting flights and downsizing the aircraft. So you can't tell me that it's so flippin' expensive to fly that route simply because of supply and demand.
$2,000+ return for a family of 2 adults and a child with over 6 months lead time 😡.
Go on, keep telling me that's fair when I could pay a shedload less for a longer flight to other parts of the country, or even the world.
Not everyone in those parts of the country earn mining salaries.
morno
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Brisbane to Mount Isa, there's another hugely ripped off route.
I have lived in Mount Isa and I continue to have housing interests in Mount Isa, and I can tell you now that if it were an in demand route, then Qantas wouldn't be cutting flights and downsizing the aircraft. So you can't tell me that it's so flippin' expensive to fly that route simply because of supply and demand.
$2,000+ return for a family of 2 adults and a child with over 6 months lead time 😡.
Go on, keep telling me that's fair when I could pay a shedload less for a longer flight to other parts of the country, or even the world.
Not everyone in those parts of the country earn mining salaries.
morno
I have lived in Mount Isa and I continue to have housing interests in Mount Isa, and I can tell you now that if it were an in demand route, then Qantas wouldn't be cutting flights and downsizing the aircraft. So you can't tell me that it's so flippin' expensive to fly that route simply because of supply and demand.
$2,000+ return for a family of 2 adults and a child with over 6 months lead time 😡.
Go on, keep telling me that's fair when I could pay a shedload less for a longer flight to other parts of the country, or even the world.
Not everyone in those parts of the country earn mining salaries.
morno
It IS supply and demand, the demand is low so they cannot fill aircraft so fares go up.
If you think Bne -Mt Isa is expensive try Bne -Winton, or Bne - Richmond!
Supply and demand works both ways.
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I understand supply and demand. The point is that the difference in airport charges works out to $12.91 a passenger. It is a contribution but not the main driver in the high fares.
Charging exhorbinant airfares just because people have little choice is ethically wrong. Why should they be penalised for living in remote parts of the country?
morno
Supply and Demand is only part of it. They need to have staff there, some of whom are working on Full-Time undoubtedly, those costs for their wages are spread amongst far less passengers than at other larger airports.
They're operated by Contractors such as Alliance etc... so Qantas and Virgin need to make their cut and then so do the people who hold the Contracts.
Add in the fact that they know their main customers are likely from the mining sector who are on good coin or having their travel paid for or subsidised by the Company, so they know they add a little on the top as well. Rather like Property in Darwin where they know the Defence Force often subsidises it so prices that would otherwise be laughed at in most of the country don't look as bad.
This inquiry really is laughable to say the least I think, unless there is some kind of evidence of collusion between the majors in terms of the prices there really is nothing that can be done, they can't demand that they lower the prices so their only real option is to try and give incentives for other operators to have a go and add a bit of extra competition! Certainly doesn't require the money and expense of an inquiry to work that out does it?!
They're operated by Contractors such as Alliance etc... so Qantas and Virgin need to make their cut and then so do the people who hold the Contracts.
Add in the fact that they know their main customers are likely from the mining sector who are on good coin or having their travel paid for or subsidised by the Company, so they know they add a little on the top as well. Rather like Property in Darwin where they know the Defence Force often subsidises it so prices that would otherwise be laughed at in most of the country don't look as bad.
This inquiry really is laughable to say the least I think, unless there is some kind of evidence of collusion between the majors in terms of the prices there really is nothing that can be done, they can't demand that they lower the prices so their only real option is to try and give incentives for other operators to have a go and add a bit of extra competition! Certainly doesn't require the money and expense of an inquiry to work that out does it?!