Ansett's decision to increase airfares to and from Perth outrageous

19/1/99

Premier Richard Court has described as outrageous the decision by one of Australia's major airline operators to further increase its long haul fares to and from Perth.

Mr Court said both the major airlines had consistently increased fares on the profitable east-west run and taken advantage of a situation in which people had virtually no alternative to air travel given the long distance involved.

"Western Australians won't take kindly to being treated in this way," he said.

From January 23, Ansett Australia will increase by an average of five per cent some of its fares on domestic flights to and from Perth. The fares affected by the increase are full economy and flexible economy.

Mr Court said the announcement would see a Perth-Sydney standard economy return airfare increase from $1,450 to $1,522 from Saturday and would mean that since the end of 1997 fares would have increased by 9.7 per cent, which is more than five times the rate of inflation over the same period.

The increase would place further burden on the business sector in WA, as the fares targeted were sold mainly to business customers because of their flexibility.

"There would be very few places in the world that an airline is able to repeatedly increase its fares on its most profitable routes," the Premier said.

Figures show that since 1992 airfares from Perth to Sydney have risen by 29 per cent, or on average 4.2 per cent per year, which is double the rate of inflation over that period.

Mr Court said he intended to raise his concerns about escalating airfares with Federal Transport Minister, John Anderson.

"I would urge the Federal Government to encourage new operators to enter the marketplace or negotiate to allow more international carriers the right to offer domestic routes," the Premier said.

He said the State Government would also feel the impact of the increased fares.

"At all times the Government seeks to gain the best value for the taxpayer's dollar when paying for airfares," Mr Court said.

"However, these efforts are frustrated in the current marketplace by continued increases above inflation.

"As a consumer, the State Government is constrained by the lack of pricing flexibility offered by the major domestic carriers in Australia. For example, the Government would prefer to opt out of the frequent flyer program and benefit from cheaper fares but this is not possible with the current arrangements.

"There is a need for the carriers to be more flexible when it comes to pricing and specifically catering for different sectors of the marketplace such as Government."

Media Contact: Bronwyn Hillman 9222 9888