Sydney -Major airlines are fighting the biggest war in 15 years over the lucrative Pacific route linking Australia and the United States, experts say.
Carriers are slashing prices and offering special deals after US
giant Delta and Virgin's V-Australia entered the market this year
- just as the downturn grounds swathes of passengers.
"It's not a pretty place right now," said Peter Harbison, of the
Centre for Asia-Pacific Aviation research group.
Analysts are tipping at least one airline to pull out within
months after the new players muscled in on a route long dominated
by Australia's Qantas and US carrier United Airlines.
Fares are touching all-time lows, less than half of those paid a
year ago, on a route that has not been so competitive since
Continental and Northwest pulled out in the early 1990s.
"I think (fares are) probably about as low as they've ever been.
It's not just the competition and the arrival on the route of
V-Australia and Delta," said Tom Ballantyne, chief correspondent
for Orient Aviation magazine.
"The current recession is hitting the airline industry very
hard, particularly the high-yielding business-class traffic."
The entry of Delta, the world's biggest airline, this month
sparked a furious round of discounting on what is one of the
globe's most profitable routes.
Some fares have dropped to just $530 return and
carriers are offering extra incentives, such as V-Australia's free limo pick-up for business passengers.
Australian flag-carrier Qantas is selling business-class seats
two-for-one and has taken the "unprecedented" step of letting
children fly free.
"This is the first sale of its kind for many, many years," a
Qantas spokesperson said.
Analysts are convinced the blood-letting will kill off one
player, possibly as early as October, with V-Australia tipped as
the most likely casualty.
"It's unlikely that all of the carriers will continue to serve
on the route. There's simply too many seats on the route and you
can't fill them," Ballantyne said.
"Delta is a pretty big airline, they're not going to start and
then leave. But V-Australia may decide this is not worth the
effort."
However, V's operator Virgin Blue has announced a joint venture with Delta which is currently awaiting regulator approval.
America's United has underlined its commitment to a route it has served for 24 years, while a pull-out by Qantas, which accounts for half the market, is unthinkable.
"We've invested heavily in that route and we've no plans to do
otherwise," the Qantas spokesperson said.
Until one airline blinks, passengers will be able to enjoy cheap
seats on the 14-hour journey to and from Los Angeles.
"It's fantastic for consumers - but very bad for airlines,"
Ballantyne said.
- AFP