Source: Channel NewsAsia Author: Asha Popatlal 12/26/2009
Subject Concerned: Opinion Airlines Aviation Fuel Airport
Demand for air travel has been picking up in recent weeks especially during this year-end festive period. But that means, unfortunately for travellers, so have air ticket prices.
In July, an air ticket to Europe that usually costs between S$1,200 and S$1,500, plunged to as low as S$600 to S$900 in some cases as carriers slashed fares to stimulate demand.
The recent economic recovery has seen prices, especially for business and economy class tickets, increasing.
Shukor Yusof, aviation analyst, Standard & Poor's, said: "Air fares have gone up in the last few months because of the demand in travelling in both low cost and full service carriers.
"And it will continue to grow in future because of the growing demand for economy (fares), which has gone up 10 to 15 per cent from middle of the year."
Changi Airport saw the fourth straight month of increase in passenger traffic. It handled more than three million passengers last month, a growth of nine per cent year-on-year.
Travel agents said that while the leisure sector may be back on track, business travel is still recovering slowly as many corporate restrictions are still in place.
Still, looking ahead to 2010, travel agents said that while prices are unlikely to hit rock bottom again, main carriers are set to introduce more variety in price ranges.
Alicia Seah, senior VP, Marketing and PR, Commonwealth Travel Service, said: "Moving forward, we do not see that airlines will adjust it so drastically. But in fact we have received news from the airlines there will be more tiered air fares.
"For example, if you travel between Monday and Thursday, it will be less expensive compared to you travelling on a weekend. And of course, in place already are low seasons and peak seasons."
Compounding the issue is volatile oil prices. While fuel surcharges fell by about 30 per cent this year, after peaking in 2008, they could well head north again, adding to the final price tag for air travel.