Big Qantas routes become fare game

PLUNGING passenger demand for overseas travel has created an air fare discount war that is expected to hit Qantas hard.

International fares to some destinations have dropped by 50 per cent, particularly for long-haul flights to the US ? Qantas' most profitable overseas route ? and Europe.

Travel writer Clive Dorman believes Qantas will have to consider transferring some aircraft to Jetstar for European routes to allow the budget airline to better compete with the cheap deals on offer during the downturn.

Dorman said that in Europe and the US, the two areas where Qantas was facing the most competition, it was even doing two-for-one deals.

He speculated that Qantas might not wait for the delayed arrival of the Boeing 787s and instead transfer its Airbus A330s to its offshoot, Jetstar, to enable it to establish low-cost Europe flights as competition heats up.

He said Emirates and Etihad had capitalised on tougher times. "There is a huge potential for travel between Europe and Australia being unlocked by these new Middle Eastern carriers that Qantas can't do with its massive 747s and Airbus super jumbos, which are way too big for these routes."

Meanwhile lower demand, new market entrants and competition have created the cheapest fares in years. "It's a good time to be an international traveller," a Flight Centre spokesman said.