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Airfare chaos will dampen summer fun

Consumers may be confused by the variety of airline fares they are offered on long-haul flights this summer as airlines try to recover from their worst slump ever through a combination of promotional offers and price hikes, experts said yesterday.

"Seasonality has gone out the window completely this year," said Luke Clarke, an editor at Singapore-based Travel Weekly East, a professional travel publication that covers the Asia Pacific region.

"Instead you're going to have pre-SARS and post SARS. The second quarter was a wipe-out, so the third and fourth quarters will have to make up for that," he said.

The list price of tickets will go up, but this will be juxtaposed with special offers, Clarke said. For example, Singapore Airlines is offering two-for-one ticket deals to Hanoi and Seoul in economy class, but its business class fares have gone up.

SARS fears have slashed travel across the Asia-Pacific region. Bloomberg News reported yesterday that Asian airlines have cut 1,150 flights since mid-March. There are now signs of a slow return to the air as the number of new infections drops in SARS-affected areas.

Summer travelers from Taiwan will find the asking prices for their flights differ by up to NT$20,000 on a round-trip ticket depending on the airline and the departure date. If you fly to Los Angeles before June 21 with Eva Airways Corp (長榮航空) you will pay NT$17,300, but you must stay in the US at least one month, according to Come First Travel in Taipei. After June 21, the same ticket will set you back a staggering NT$32,000.

If you don't mind transiting in Hong Kong, Cathay Pacific will get you there for NT$13,600, but you have to travel before July 15. After that cut-off date, Cathay's prices rise by NT$10,000 per ticket. Currently passengers arriving in Taiwan from Hong Kong -- even transit passengers -- are required to undergo a 10-day home quarantine.

It is not unusual for airlines to push prices up in the summer peak season as passengers are fighting for a limited number of seats.

"The airline industry is extremely seasonal and it is quite common for airlines to generate the majority of their earnings and sometimes even all of their annual profits from peak periods," said Peter Negline, an airline industry analyst at JP Morgan in Hong Kong.

But Negline doubts local airlines can hike prices too high to recover SARS losses.

"We doubt Taiwanese carriers can indulge in monopoly type behavior such as simply driving prices higher," he said. "They compete against some large, credible foreign carriers who will quickly remove any major market imbalance."

The nation's two international carriers denied yesterday that they would push up prices to recover SARS losses.

"We currently have some promotions to encourage more travel as our loading in May and June is not so good," said a source at EVA on condition of anonymity.

"In the third and fourth quarter we will go back to our normal prices. There will be no difference in price due to SARS," the source said.

Getting the public back on planes appears to be job No. 1.

"Right now we are trying to encourage more people to travel," said Roger Han (韓梁中), spokesman for China Airlines Co (華航). "When we achieve full loads, we will think about the next stage which may include price increases."

Toward that goal, China Airlines has run various campaigns, including an 82-percent discount on selected routes, Han said.

Local airlines should instead hope for a summer stampede of holiday-hungry tourists.

"The airlines are hopeful for pent-up demand, but this may take some time to emerge, although warmer weather could encourage travelers to book for that annual resort holiday," Negline said.

Travel advisories from the World Health Organization (WHO) are still hurting the local travel industry.

"It is a tough reality but the WHO travel bans are intended to discourage travel to/from SARS infected areas simply to prevent the spread of the disease both regionally and globally," Negline said.

"Initially the WHO said it had not advised against travel to SARS-affected areas," Clarke said. "I think they were quite shocked by the effect on the world economy of their later advice on travel."

The extent of the economic impact as a result of WHO travel advisories may lead to a review of the advisory policy.

"After this, I believe there has to be soul-searching between the WHO and industry groups to see how to do this better next time," Clarke said.
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