Airline price gouging a fact of life in regional Australia
Alan Joyce said today "We compete on the price of every single seat on every single flight, and it's this competition which ultimately sets airfares.
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So, if there's a cost advantage, a cost benefit, history has shown that the airlines will use it to sharpen fares."
Except on regional routes where they collude with Virgin on which airlines flies which route and there is no competition.
It has been proven that airport fees make up no more that 8% of fares on regional routes.
If they are only charging $89 between Sydney and Melbourne then the Airport fees make up a much larger percentage.
On a $1500 fare from Cloncurry to Brisbane it's next to nothing.
So we are subsidising the cheap coastal fares.
By his own admission today this whole business with airports is a moot argument if it is "competition which ultimately sets airfares."
In North West Queensland Qantas conveniently doesn't fly any routes that Virgin fly and Virgin doesn't fly any of the routes that Qantas fly.
Neither fly the routes that REX fly.
This is the same in most regions, especially where there is no regulation.
So the issue of high air fares in regional Australia is solved.
Where there is no competition to ultimately set airfares the airlines set them very very high.
One would assume to offset cheap fares where there is competition.
It has nothing to do with booking as far ahead as possible, airport fees, uptake or economies of scale.
When a price is set as high as one like just because you can.... this is called price gouging!
This should be all the evidence the ACCC needs to investigate, it came straight from Mr Joyce himself.
You'd think a CEO on 24 million would be smarter that to admit to blatantly ripping off his customers.
Hamish Griffin,
Cloncurry
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