American Express Airfare Index shows 35% drop in Australian airfares

Airline Industry Information, Sept 5, 2001

AIRLINE INDUSTRY INFORMATION-(C)1997-2001 M2 COMMUNICATIONS LTD

The latest report from the quarterly American Express Airfare Index has indicated that domestic airfares in Australia have dropped by 35% since the commencement of operations by Virgin Blue, a discount carrier.

Jim Georges, the Director-Head of American Express Consulting Asia Pacific, has stated that the continuance of lower airfares in Australia is dependent upon Virgin Blue's ability to stay in the market. Georges also said that the lower airfares had increased the price gap between economy and business class travel, making it more tempting for companies to trade down a class in order to reduce corporate travel costs, AsiaPulse reported.

The report also indicated that, within the overall Asia Pacific region, first and business class airfares have increased 0.4%, with full economy fares also increasing by that amount. Discount economy airfares have however fallen by 3.5% throughout the region, while off-season excursion airfares dropped by 3.9% and lowest peak-season fares by 4.4%. Georges said that the region's reductions were impacted upon by the Australian domestic market, and stated that crude oil prices continued to be a factor affecting airfares.

((Comments on this story may be sent to aii.feedback@m2.com))

.END

.PUB 430 >PD SEPTEMBER 5, 2001 >JN AIRLINE INDUSTRY INFORMATION .PRICEDATE NOT APPLICABLE .DAY