Jetstar, Virgin Blue, Qantas, Tiger Airways face toughest domestic fare discounting environment ever

Australian domestic fare discounts have dropped to their lowest levels since the Bureau of Transport and Regional Economics commenced their survey in 1992, as Jetstar and Tiger Airways vie for the ‘lowest fare’ carrier status. Qantas and Virgin Blue meanwhile have enjoyed reasonably resilient business and restricted economy fares, thanks to a clamp down on capacity. But these benefits could be eroded as Tiger enters the lucrative Sydney-Melbourne and Sydney-Adelaide markets from July.

Australian domestic ‘Best Discount’ air fares index (Jul-2003 = 100): May-04 to May-09

‘Best discount’ fares this month are some 30% below July 2003 levels and have been very soft since Oct-2008, when the global financial crisis started to reach Australia’s shores.

Business fares remain above July 2003 levels – but have been easing since the peak in October last year, as have restricted economy fares. 

Australian domestic air fare index (Jul-2003 = 100): May-08 to May-09

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