High-f ly­ers in the hot seat

The Weekend Australian - Travel - - Destination Europe -

THE thorny is­sue of out-of-con­trol pric­ing was raised at a na­tional tourism con­fer­ence in Canberra last week, with hote­lier Ian Drum­mond ques­tion­ing high-pow­ered tourism chiefs about high do­mes­tic air­fares. Qan­tas chief Alan Joyce was asked why pas­sen­gers were be­ing charged up to $450 one way in econ­omy class from Ade­laide to Alice Springs and up to $600 one way, also in econ­omy class, on the Perth to Alice Springs route.

Re­gional Ex­press (Rex) is also in Drum­mond’s sights. The hote­lier and ex­ec­u­tive chair­man of Aus­tralian Prop­erty Projects, owner of six ho­tels in re­gional ar­eas such as Kan­ga­roo Is­land and Alice Springs, reck­ons Rex charges up to $300 one way on 20-minute flights from Ade­laide to Kan­ga­roo Is­land.

But his main beef is the mo­nop­oly Qan­tas en­joys on the Alice Springs route.

‘‘When Tiger was grounded, Qan­tas had a mo­nop­oly,’’ Drum­mond says. ‘‘Tiger has come back into the mar­ket and is still not back on the Alice Springs route. I reckon this is price goug­ing . . . with that Perth one-way $600 ticket. I reckon you could go to Bali and back with a ho­tel thrown in for less than that. This is smash­ing tourism [to the Alice Springs re­gion].

‘‘I am not ask­ing Qan­tas to make losses. I just want them to re­view the Alice Springs route in terms of their stated po­si­tion as the ma­jor spon­sor of Aus­tralian tourism and their whole con­cept of the Spirit of Aus­tralia. ‘‘That means a fair go for Alice Springs.’’ Put on the spot, Joyce did not of­fer any quick fix, say­ing: ‘‘The avi­a­tion in­dus­try is fac­ing a lot of head winds in terms of the eco­nomic sit­u­a­tion.’’

Qan­tas flights from Sydney to Lon­don earn $1 mil­lion in rev­enue for the air­line. ‘‘But,’’ says Joyce, ‘‘we’ll spend $500,000 of that rev­enue on fuel on that flight alone. Fuel is at record high lev­els. Like any busi­ness, Qan­tas needs to get its re­turn on cap­i­tal.

‘‘It has not got­ten its re­turn on cap­i­tal since the global fi­nan­cial cri­sis. Ev­ery­body has to recog­nise the air­lines have to make re­turns as well.

‘‘It’s right to say . . . that the re­turns we get don’t sup­port the fact that we are charg­ing ex­or­bi­tant air­fares. If that were the case, I would love it. But it’s not.’’

Drum­mond also put Tourism Aus­tralia manag­ing di­rec­tor An­drew McEvoy un­der the spot­light over high prices. But McEvoy, billed as Aus­tralia’s most se­nior gov­ern­ment tourism of­fi­cial, also de­fends the air­lines as be­ing ‘‘un­der such pres­sure from their share­hold­ers . . . they need to make money’’. He adds that ‘‘the days of the air­lines do­ing the right thing are over . . . [they] have to make money’’.

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