News National Cheap airfares to continue following MH17 tragedy

Cheap airfares to continue following MH17 tragedy

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Hands up if the thought of stepping onto a plane right now gives you the jitters.

Doubts over the safety of flying seem justified following the recent MH17 and MH370 air disasters. Airlines are remaining tight-lipped on any major downturn in business but sources told The New Daily little impact is being felt.

The true situation regarding passenger loads will become clearer when official quarterly figures are released at the end of August.

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Mr Justin Wastnage, aviation policy director at the Australian Tourism and Transport Forum, suggests airlines are weathering any perceived storm.

“Anecdotally, we’re not hearing that it’s had any impact,” he explains.

“It’s a very busy time to fly and certainly people who’ve booked their travel six months in advance are not going to cancel because of [these uncertain times].”

Will fares be slashed?

While airlines are unlikely to offer foolish deals as a result of the Malaysia Airlines tragedies, extended sales and significant savings are available for the savvy shopper.  

A Qanatas sale running last week advertised a return flight to Los Angeles for just $1299, while a similar trip to London is selling for under $1800.

Mr Wastnage believes ticket prices have almost reached rock bottom.

“It’s very hard to get prices any lower than they already are,” he says.

“Last year, collectively, the airlines globally made 2.5 per cent profit. Any other business you probably wouldn’t invest in if the yields were so low.”


But while Mr Wastnage says fares are “as low as they’re gonna get” he does suggest a greater period of consistently low airfares is likely.

“When you track airfares there’s always dips and peaks. I wouldn’t be surprised if there was a dip now.”

Mr Wastnage pointed out the cost of plane tickets isn’t necessarily driven by the airlines themselves and is usually triggered by complex computer systems that track ongoing demand.

For example, if more people are looking at airfares then the computer recognises the demand is high and prices are likely to rise.

On the flipside, periods of low activity might prompt prices to plummet.

“What may have happened in light of all this is people who may have casually looked and thought ‘Oh we’ll start planning our holiday now’…they’re not doing that,” he says.

“Fewer people looking online then triggers the algorithm to put prices lower. It may not be as simplistic as the airlines actually thinking they need to reduce prices.”

Turbulent times for airlines?

“Air transport is so ingrained in people’s lives. Australians have definitely got into the habit of taking long-haul trips. It used to be a once-in-a-lifetime experience, then it became twice. Now it’s sort of once annual.

“Gen Ys are taking long-haul trips but so are families and retirees. It takes a long change that psyche and a lot of people recognise that actually, this was an unfortunate effect of a conflict which shouldn’t have involved them.”

Mr Wastnage says airlines have experienced similar periods of uncertainty in the past and proved resilient.

He says airlines are capable of improving their standards and image.

An example is Indonesia, formerly known for having a poor safety record that led to a loss of confidence amongst consumers, but which then went on to boost its safety after reforms were put in place.

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