Early-bird gamble

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This was published 13 years ago

Early-bird gamble

Cash in ... a volatile market could mean cheaper prices for European holidays.

Cash in ... a volatile market could mean cheaper prices for European holidays.Credit: Rob Homer

The strong Australian dollar and rising competition means cheaper fares to Europe next year, writes Clive Dorman.

The strong Australian dollar and increased competition from the Middle Eastern airlines are holding down 2011 airfares to Europe, though travel agents have warned the situation is volatile and cheaper spot specials might still appear in the market.

As the airlines began releasing their early-bird specials for 2011, Singapore Airlines made the unprecedented move to guarantee that it will not undercut its early-bird rates.

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Most of the major Australian, Asian and Middle East airlines are now selling advance-purchase fares for travel to Europe next year in the $1700-$1900 range, depending on the destination, and with the proviso that these rates might not be available in the busiest European summer months from June to August.

However, considering the aggressive price competition on flights to the US - now just above $1000 return when they were the same price as Europe until two years ago - Australians are entitled to wonder why fares to Europe have barely fallen despite the effect of the global recession since 2008.

Travel agents say the booming demand for travel between Australia and Europe that has fuelled the rise of the three Middle East airlines - Emirates, Etihad and Qatar - is keeping prices high.

But with dozens of Asian and Middle East carriers competing for the dollars of outbound Australian travellers, along with Qantas and now V Australia in cahoots with Etihad Airways, they warn that the situation is volatile.

"If you're planning to travel overseas in 2011, this is the time to book," says the general manager of Travel.com.au, Lisa Ferrari.

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"Early-bird airfares [for 2011] are $800 cheaper than this year's. With the advantage of the strong Aussie dollar, travellers can save on airfares and splurge on accommodation and shopping." She says that, with its guaranteed $1889 return fares from Melbourne, Sydney and Brisbane to European destinations from Athens to London, Singapore Airlines has "set the benchmark" for next year.

"The airline is reassuring travellers that they won't be penalised for booking their travel early, offering a promise that if cheaper airfares to Europe are released, they'll reissue your ticket to the cheapest fare and will refund the difference," Ferrari says.

The founder of the Flight Centre chain, Graham Turner, says the situation is changeable. With fares below $2000 and even $2000-$2500 in high season, he says prices are attractive to consumers compared with recent years, when fares have neared $3000.

"It'll depend on how the traffic goes whether [the airlines] think they can get the yield up over the next year or not," he says. "Particularly around Christmas time [for family visits] and next year, it's Europe that's the big market and that's where people are generally most interested in.

"These [early-bird fares] look good value and will certainly be good value if the traffic holds up. If they get holes early next year, then you could get cheaper fares. My feeling at the moment is that these prices are pretty good but only time will tell."

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