4-Jun-2014 11:26 AM

Qantas predicts airfare rise upon slowing domestic capacity growth

Qantas CEO Alan Joyce predicts airfares will begin to rise now that both Qantas and Virgin Australia have slowed domestic capacity growth (Fairfax, 04-Jun-2014). Mr Joyce said underlying growth in the market was between 4% and 5% p/a but that capacity had grown by an average of 8% over the last few years: ''What that has meant is roughly for every percentage over the demand that meant a 1% yield fall... And that is why our yields have been down by about 4%.'' Mr Joyce said a more rational capacity market meant fewer discount fares and higher load factors.

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