Airlines rush in to cut airfares as travel interest grows after stimulus deal

Airlines are already slashing prices in response to interest in taxpayer-subsidised half-price airfares.

Virgin Australia isn’t waiting for federal government subsidies to cut fares in half. Picture: John Feder

Jetstar has piled in on the rush to capitalise on demand for half-price airfares, following Virgin Australia’s move this morning to slash fares before federal government subsidies take effect.

Virgin Australia said the heavily discounted fares were in response to overwhelming demand from customers on the back of the federal government’s promise of 800,000 half price airline seats.

Within hours of Virgin’s announcement, Jetstar flagged it would cut fares to as low as $25 one way for a limited sale period on Friday afternoon.

It follows Thursday’s announcement by the Prime Minister of 800,000 half-price airfares to stimulate domestic travel and help COVID-ravaged airlines and tourism operators.

The taxpayer-subsidised fares will not go on sale until April 1, for travel from May 1.

A Virgin Australia spokesman said they wanted to give customers “a taste of what’s to come” after being inundated with guests wanting to book the government’s half-price fares.

“It’s important that we continue to play our part to get Australians travelling so that we can bring more of our people back to work and reboot the tourism economy and our half-price airfare sale is a testament of that,” the spokesman said.

“There has literally never been a better time to fly and guests will be able to book fares today to popular Australian destinations such as Byron Bay and the Gold Coast for no more than a taxi fare.”

The cut price fares will only be available between 5pm and 7pm on Friday (AEDT), from $55 for Sydney-Byron Bay, or Sydney-Gold Coast one-way, for travel over the next fortnight (March 15 to 28).

The spokesman said the fares would include baggage, seat selection, Velocity points and status credits.

“We have so many amazing tourism destinations right here in Australia, and our irresistible prices will get Australians exploring our own backyard which will go a long way in helping the nation’s economic recovery,” he said.

Jetstar’s fares include $25 one-way seats from Adelaide to Avalon, $79 one way for Brisbane-Cairns, and $139 one way between Perth and Cairns.

The discounted fares come as new federal government data showed travellers were already enjoying some of the cheapest travel on offer in years.

The Bureau of Infrastructure, Transport and Regional Economics domestic airfare index, showed full economy fares were at their lowest level since October 2017, and business class fares were at eight-year lows.

Qantas Group CEO Alan Joyce has previously suggested travellers could expect low fares for an extended period while airlines tried to rebuild demand and restore confidence in flying.

Speaking at the airline’s half-year results last month Mr Joyce said airfares would be “very attractive going forward”.

“There’s a lot of competition around because we’re in the same boat and when international (travel) starts, there’ll be a lot of international carriers in the same boat,” said Mr Joyce.

“This will be a great time for consumers, it needs to be. We need to get people back in the air travelling again (for the benefit of) all the little tour operators around the country.”