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Travellers spoilt for choice as airfares plunge

SINGAPORE — It is raining cheap air tickets this year and it is turning out to be a good time to travel, particularly to Europe.

Singapore Airlines aircraft sit at Changi Airport in Singapore, on Thursday, March 3, 2016. Photo: Bloomberg

Singapore Airlines aircraft sit at Changi Airport in Singapore, on Thursday, March 3, 2016. Photo: Bloomberg

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SINGAPORE — It is raining cheap air tickets this year and it is turning out to be a good time to travel, particularly to Europe. 

Thanks to global carriers slashing ticket prices in a fare war to grab a larger share of the international skies, long-haul airfares have plunged in the first half of this financial year from the same period in the year before.

Airfares to cities in Europe such as London, Paris, Amsterdam, Frankfurt, Rome and Budapest have dipped below S$1,000 from about S$1,200 to S$1,400 last year, according to Dynasty Travel, one of the biggest travel agencies in Singapore. On the short routes, largely plied by low-cost carriers (LCCs), fares to cities such as Manila, Yangon and Seoul have about halved, with others down by about 15 per cent on average.

“Travellers today are spoilt for choice on the long-haul routes, with airlines aggressively launching promotional fares this year,’’ said Ms Alicia Seah, director of marketing and communications at Dynasty Travel. 

‘‘The competition between big carriers like Singapore Airlines (SIA), Qatar Airways, Emirates, Etihad, among others, has severely intensified ... Even fares on certain short routes are drastically down. The impact of this is already visible in the market.” 

Dynasty Travel has seen overall sales grow by about 35 per cent in the first few months of this year, with bookings to Europe up by around 30 per cent. The falling euro has also helped fuel the holiday-booking frenzy among Singaporeans as travel to Europe becomes more affordable. Travel agencies have, accordingly, beefed up sales and marketing campaigns to make the most out of the low-fare season. Dynasty Travel organised a fair at Suntec over the weekend, while the Singapore Outbound Travel Agents Association (Sotaa) held Travel Revolution 2017 at Marina Bay Sands.

“We are confident of achieving twice the bookings as we did at the same event last year … Through promotional fares, we see long-haul fares down by up to about 20 per cent while the savings on short routes are close to around 15 per cent,” said a spokesperson at Chan Brothers Travel, another leading travel agency in Singapore.

Industry experts noted that airlines have increased their fleet sizes aggressively over the past few years, and the resultant capacity expansion is driving the intense competition to sell more seats. This has helped to keep fares low despite the high travel demand from Singapore. 

“Fuel prices were very low in 2016, and remain relatively low, which is also contributing to driving competitive fares to a wide variety of destinations,” said Mr James Marshall, vice-president of Transport Services Asia Pacific at Expedia Group. He noted that passenger demand from Singapore continues to be high and is growing.

SIA Group, which includes SIA, SilkAir, Scoot and Tigerair, has announced 14 new destinations for this financial year. These include Stockholm by SIA and Athens by Scoot, with flights starting from May 30 and June 20, respectively. Other new routes launched include flights to Düsseldorf, Canberra and Wellington by SIA; Fuzhou, Luang Prabang and Vientiane by SilkAir; Wuxi and Zhengzhou by Tigerair; as well as Dalian, Jaipur, Amritsar and Sapporo by Scoot.

“While airfares are typically determined by route supply and demand ... we do review our fares in relation to market-specific developments, such that our flights are competitively priced,” said a spokesperson for Scoot and Tigerair.

Next year, with the ultra-long-range Airbus aircraft A350-900ULR added to its fleet, SIA will relaunch the world’s longest non-stop flight between Singapore and New York. It will also relaunch fights to Los Angeles and a third destination in the United States. Meanwhile, Qantas will be launching its first non-stop Australia-Europe services, and Garuda Indonesia is planning to launch its own services to the US via Japan. 

Airlines, in some cases, have added capacity ahead of the expected demand growth, and as a result they have had to cut fares to fill those seats, aviation analysts said.

“That has led to growing competition among carriers, especially in Asia, where not only are the local carriers growing, but you also have the Middle Eastern carriers vying for their share of long-haul markets, such as Asia-Europe and Asia-Americas,” said Mr Ellis Taylor, Asia finance editor at FlightGlobal.

“I expect airfares to remain cheap for much of this year, but they could possibly tighten up towards the end of the year, particularly if the price of oil starts to move up, forcing carriers to raise fares to recoup the higher costs”.

During the past three years, according to Expedia, the LCCs have added substantial capacity from Singapore, particularly to Jakarta and Kuala Lumpur, which now have four times more capacity than in 2014.

Several new destinations within Asia have also become accessible to Singaporean travellers via direct flights, including Chinese cities such as Shenyang via Scoot. LCCs are even gearing up to fly beyond Asia, with AirAsia planning to add its first US destination — Hawaii — later this year.

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