Controlling the air fair?
April 28th 2010 11:40
Category: No Category
There is no stopping budget airline getting their way of attracting customers with some ridiculously low airfares. Not only has the creation of budget airlines provided us, as customers, more choice and better pricing, it has also created a space for competition in driving the airfare lower from the major airlines.
However, when is it enough?
I thought about this while reading an article in the news today: Blowing the Budget - Air Asia X vs Malaysia Airlines
In a nutshell, the Malaysian government is blocking a bid from Air Asia X to expand it's services between Malaysia and Australia in an attempt to save its national airline from going out of business.
A normal Malaysia Airline airfare from Sydney to Kuala Lumpur cost roughly around $1200 including all taxes. An average fare with Air Asia X from Melbourne to Kuala Lumpur can cost as low as $500 including taxes (excluding onboard food and entertainment) plus the return airfare from Sydney to Melbourne domestically if you are not from Melbourne.
Of course, we all argue that competition is healthy for the industry and better pricing is good for all of us. However, it does come to the question that when is enough? We all watched Japan Airlines struggle to stay afloat during the financial crisis. And there has been many other major airlines on the brink of extinction as well. Without jeopardising their full service and customer focused business, they simply cannot compete with the no frills options.
Should there be regulation to avoid another industry disaster (which also mean loss of jobs, hence a disaster for society as well)? Should consumers be educated to not to take low fares for granted? Should the governments be allowed to step in to a private corporate affair?
However, when is it enough?
I thought about this while reading an article in the news today: Blowing the Budget - Air Asia X vs Malaysia Airlines
In a nutshell, the Malaysian government is blocking a bid from Air Asia X to expand it's services between Malaysia and Australia in an attempt to save its national airline from going out of business.
A normal Malaysia Airline airfare from Sydney to Kuala Lumpur cost roughly around $1200 including all taxes. An average fare with Air Asia X from Melbourne to Kuala Lumpur can cost as low as $500 including taxes (excluding onboard food and entertainment) plus the return airfare from Sydney to Melbourne domestically if you are not from Melbourne.
Of course, we all argue that competition is healthy for the industry and better pricing is good for all of us. However, it does come to the question that when is enough? We all watched Japan Airlines struggle to stay afloat during the financial crisis. And there has been many other major airlines on the brink of extinction as well. Without jeopardising their full service and customer focused business, they simply cannot compete with the no frills options.
Should there be regulation to avoid another industry disaster (which also mean loss of jobs, hence a disaster for society as well)? Should consumers be educated to not to take low fares for granted? Should the governments be allowed to step in to a private corporate affair?
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