Is this as good as it gets for travellers?
A global travel industry pioneer is warning that airfares will not fall much from here.
Fares in real terms are at historic lows, but Flight Centre founder and chief executive Graham “Skroo” Turner says this could be as good as it gets for travellers.
His company sold return flights to Europe at the weekend for under $1000 but airlines were indicating their yields — and ticket prices — were stabilising and could climb later this year.
Although airline behaviour was difficult to predict, Turner said airline bosses in Australia and New Zealand had told him the surge in capacity would flatten out in the second half.
Turner helped found the forerunner to Flight Centre, Top Deck Travel, in 1973 with old double-decker bus tours around Europe. He maintains a hands-on role in the business, which has expanded to 21 countries with a workforce of close to 20,000.
He was in Auckland yesterday to meet staff and industry leaders and help mark Flight Centre's 30th birthday in this country.
Turner said he had been wrongly calling the end to falling airfares for the past five years but there were signs the number of new carriers coming to this country had peaked for the time being.
Besides increased capacity, low fuel prices in the past two years had kept airfares down but oil prices had also stabilised and were heading up.
Flight Centre’s managing director for New Zealand, Dave Coombes, said the local airline market looked as if it was at a saturation point.
“I think we've seen the biggest movement in the year just gone.''
Airlines were constantly reassessing where to deploy their planes.
“It's a massive science at the airline end — the beauty for us is that it's created an environment that we've coined the golden era of travel.''
Turner said the firm was maintaining its “bricks and mortar'' emphasis because that was where the bulk of revenue came from.
Flight Centre was floated on the Australian stock exchange in 1995, just as the internet became widely used and online travel bookings started.
Turner said that in its first year as a public company Flight Centre's revenues were just under A$1 billion ($1.07b). This year they would be close to A$20b.
Only about A$1b would come from the company's online bookings.
“So far we've been able to compete with the internet and online players.”
The company was working with Oasis, a US corporate homestay service, but believed there would continue to be big demand for hotels.