There is a war going on at the moment, and it's one you may or may not be aware of. We don't mean the war on Iraq. It isn't the Labor war against John Howard, or John Howard's attacks on Kevin Rudd. Why, we aren't even referring to the new war against smoking…
It's the dog-eat-dog airfare war, more intense, or about to get more intense than we've seen for years, even when Virgin, Qantas and Ansett were in a dog fight before September 11 and the subsequent collapse of Ansett.
Since then, that intense competition has settled back into cosy state of affairs with Qantas starting Jetstar, not only to force costs lower inside its main airlines, but to keep Virgin Blue occupied, which Virgin Blue seems to have done quite easily.
So that has prompted a couple of new entrants from the rapidly growing fleet of low cost Jetstar/Virgin Blue imitators in Southeast Asia.
It's all about who can offer the lowest airfare possible…to attract the most attention with travellers and gain a foothold against Qantas/Jetstar and Virgin Blue.
And the stakes are the Sydney, Melbourne, Brisbane routes, the busiest and most profitable in Australian domestic aviation…and the war has started…$1 seats to Sydney and Melbourne anyone?
Well yes, one of the new probable entrants was advertising a fare that low, but the fine print did mention airport taxes and charges, not to mention GST. Should've guessed: great bargains always come at a price…
On the front line in this combat zone is Virgin Blue, Tiger, Qantas's domestic business, its low-cost offshoot, Jetstar, and a couple of newer players such as Asia X and Firefly.
Jetstar was lauded as the World's Best Low-Cost Airline last Tuesday and it also received the Australia/Pacific region's Best Low-Cost Airline (surprise, surprise) and Best Cabin Staff by SkyTrax as part of their annual World Airline Survey carried out between August 2006 and June 2007.
The World Airline Survey is the yardstick for Passenger Satisfaction levels of airlines throughout the world. Not surprising when you consider that this annual survey of the world's airlines involves over 14 million respondents to interviews!
That's a hell of a lot of boxes ticked by flyers that have happily saved a buck or two.
Jetstar is Qantas' cheap subsidiary: a cost saver for airline passengers and shareholders in the airline alike.
On July 9, the airline made 10,000 $1 fares available to its email subscribers on several regional routes from Sydney, Melbourne, Brisbane and Adelaide.
The airline's website was, not surprisingly, swamped by people wanting some of these one-off specials. That's pretty good, considering nowadays a dollar won't buy a burger or even a packet of gum!
But yet another contender has stepped into the field.
Last Wednesday, the brand-new airline, Norfolk Air, revealed that it too was offering flights for just $1 on the Sydney to Melbourne leg, which is one of the main routes that airlines will be fighting over.
A week previous, Ewan Wilson, acting CEO of Norfolk Air, said there is an ongoing struggle to keep prices one-up on rival airlines.
"If you look at what's happening with Tiger and Jetstar, it's a bit of a sideshow".
"The real battle will be on the main trunk route of Melbourne-Sydney," he said.
Here, he is referring to the ongoing price tug-o-war between Tiger Airways and Jetstar.
Just a fortnight ago, Tiger announced a daily service between Perth and Melbourne, with fares starting at just $59.95 one-way. This obviously posed a direct threat to Jetstar, renowned for its cheaper-than-a-pair-of jeans flights.
Tiger also announced a thrice-weekly service between Alice Springs and Melbourne, with one-way fares beginning at $49.95.
These new routes, due to start on December 1, have already sparked some special sale-offer fares from Jetstar, as we have already seen from that one day, $1 dollar net swamping special offer.
But this is just the tip of the iceberg in a battle that, like something out of Loony Toons, looks set to carry on and on and on. Indeed just a week previous, Tiger announced that it would start a service between Melbourne and Launceston from November 29 with all-inclusive, one-way fares starting at a tiny $39.99.
Almost immediately, Jetstar jumped into gear with a counter-offer of a $29 fare on the very same route for flights between November 29 and December 13 as well as all of February.
And in a very unsurprising statement, Simon Westaway, spokesman for Jetstar, questioned the availability of Tiger's headline-making low fares.
He claimed that Jetstar's staff found Tiger Airline's cheapest fares on its Melbourne-Perth route were available on only four occasions over a prolonged period, and similar for Tiger's Melbourne to Gold Coast route.
Mr Westaway said he was considering raising the matter with the regulator. He compared the problem to his own ‘upstanding' airline, which he attested was always transparent about the terms and conditions surrounding low fares.
"We just believe that the marketing of these low fares from Tiger through their website is not very clear in terms of the availability.
"We're not saying they need to declare how many fares on what day but we just think Australian consumers might start to question when is a low fare available and when is a low fare a low fare."
The Tiger threat has also apparently made Jetstar Chief Executive Alan Joyce a little nervous as he made the comment on July 9:
"We're the only carrier that's introduced single-digit airfares. Other carriers have promised it, but we have a one dollar airfare that went on sale with 10,000 seats, we've had three dollar airfares with 30,000 seats."
