Airfare of the Day: How Much Extra Are You Willing To Pay For A Direct Flight?

Direct flights are usually more expensive than connecting flights. Airlines know that customers are willing to pay extra in order to avoid connections, especially the always time-constricted business travelers.

The question to ask is how much is too much when it comes to a direct flight. The recently announced Qantas direct service between London and Perth (John talked about it back in December) is probably an example of an airline revenue manager gone greedy. Their inaugural prices are making the news, and not exactly because of how cheap they are.

A couple days ago, I ran into this article on The Telegraph comparing the price of Qantas inaugural flight LHR-PER and return a fortnight later with a connecting flight via Hong Kong on Cathay Pacific. The verdict: Qantas wanted double the money Cathay Pacific was expecting for an Economy Class ticket. The article has since been updated to include Qantas official comment on lower discount fares, available, but still GBP 400 above the Cathay Pacific option. From the article:

“We’re conscious that this is a long flight, but not much longer than our Sydney to Dallas service,” said Qantas CEO, Alan Joyce. “It’s the kind of route that the Dreamliner was created for, because of its built-in features to reduce jet lag and improve the overall travel experience.”

Those features include larger windows, to allow in more light, better sound proofing, a more advanced air filtration system and, crucially, more leg room.

Whether these attributes will persuade passengers to spend £1,300 odd on a ticket and 18 hours on a plane remains to be seen.

I was curious to see how much off Qantas were when compared to their competitors in this route (LON-PER). A quick search on published fares using ExpertFlyer had the answer to my questions.

For an Economy Class ticket, Qantas lowest published base fare is USD 930, while the lowest priced connecting base fares published are USD 392 with two stops (Turkish Airlines), or USD 533 with one stop (Malaysia Airlines).

Qantas published Economy Class fares

Other arilines published Economy Class fares

For Premium Economy, the fare difference is not as steep. Qantas lowest published base fare is USD 2151 while the lowest priced competitor, Air France, offers a USD 1538 base fare (two+ stops). The cheapest base fare available with one stop is Cathay Pacific at USD 2417, more expensive than the non-stop.

Qantas published Premium Economy fares

Other airlines published Premium Economy fares

In Business Class, the revenue manager is envisioning some heavy business traveler traffic in that route. That is the only logical explanation for willing to charge almost double than the lowest priced competitor. Qantas lowest published Business Class base fare is USD 4205 while Turkish Airlines offers a USD 2307 base fare (2 stops) or Emirates 1-stop option for USD 2668.

Qantas published Business Class fares

Other airlines published Business Class fares

Conclusion

Qantas Premium Economy base fare between London and Perth is interesting compared with the competition. They will probably have to adjust their Economy Class prices if they want to enter on that market, as their prices seem a bit off for that sector. This should also happen on Business Class fares if they do not manage to attract business travelers.

I’ve been 17+ hours inside a plane, and even in the premium cabins it feels very long. If I were a holiday traveler in this route, breaking a long trip with a quick stop in HKG/BKK/KUL/SIN for cheaper sounds much better than being cramped for 17 continuous hours inside a plane.