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Airfares likely to rise next year

This story was first published in The Straits Times on Aug 9, 2013

AIRFARES out of Singapore are likely to increase next year but there will still be plenty of good deals for holidaymakers.

The best bargains will be reserved for off-peak travellers heading to destinations served by multiple carriers, both full-service and budget, travel agents said.

Economy passengers will bear the brunt of higher fares, with prices expected to rise by up to 4.2 per cent, said global travel firm Carlson Wagonlit Travel.

In its latest survey, the firm said the hike for Singapore travellers is likely to outpace that for consumers in other markets, such as India, Malaysia and Thailand.

Senior director Mike Orchard said: "Over the last two to three years, about 70 per cent of tickets booked out of Singapore were for economy class and there is more underlying demand which is driving ticket prices up."

The demand for corporate travel in Singapore - in both the economy and premium sectors - also continues to be strong despite the economic slowdown in Europe, he added.

Mr Orchard pointed out that unlike leisure travellers, those on business trips do not typically benefit from promotional fares that come with many conditions attached , such as blackout dates and no changes allowed to flight details.

In the leisure market, volatility will stay, said Mr Karun Budhraja, vice-president at technology and travel firm Amadeus Asia Pacific.

"The rule of thumb an airline would apply is if economies and demand are strong, the going is good so you increase the fares to rake in as much as possible."

But in markets where many players - including budget carriers - compete, the same airline will likely keep fares static or even cut them, he said.

Jetstar, which recently ran a "Pay to go and come home to Singapore for free" promotion, said it will "continue to offer competitive low fares with regular and seasonable promotions to stimulate more travel".

British Airways has just launched a sale with return fares starting from $1,288 for travellers who wish to stop in London before heading to another city in Europe or the United States.

CTC Travel spokesman Alicia Seah said: "Airfares are still competitive, to China, Australia and other markets where new flights and capacity have been added. Bottom line, there are still good bargains if you avoid the usual peak months of May, June, November and December."

Even during peak periods when the cost of travel increases by as much as 30 per cent to 40 per cent, demand is still strong.

She said: "We were fully booked in July for the current long weekend break."

CTC, which had a travel fair last month, saw the number of bookings rise by up to 40 per cent, even as prices increased by about 25 per cent on average.

Ms Seah said: "People are not just travelling but going away more regularly and farther from home."

karam@sph.com.sg

This story was first published in The Straits Times on Aug 9, 2013To subscribe to The Straits Times, please go to http://www.sphsubscription.com.sg/eshop/