Qantas suspends some First-Class services

Travel & Experience

QANTAS has temporarily suspended first-class travel on some of its long-haul services over the winter due to lack of demand for the $17,000-$20,000 seats.

In a sign of the times, this unusual move affects three long-haul routes — Sydney-Buenos Aires, Sydney-San Francisco and Melbourne-Hong Kong-London between July 6 and October 31. Demand has slipped for first-class flights as businesses have found it more difficult to justify the cost.

A Qantas spokeswoman confirmed yesterday that the airline had targeted the three routes because there was no demand for its first-class product. She said the airline would review the situation in October and hoped it would be able to reinstate the service in November. It will mean some customers will get a first-class seat at business-class prices. “We’ll sell it as a business-class service so they’ll get business-class product and service but some people will be sitting in a first-class seat,” the spokeswoman said.
Qantas generally does not reveal traffic figures on particular routes, but chief executive Alan Joyce said last month that first- and business-class traffic was down by 20 to 30 per cent.

Recently released International Air Transport Association figures show long-haul markets connecting the Asia-Pacific region were the weakest of any area in the first quarter of this year, with first- and business-class passenger numbers falling 29.2 per cent compared with a global average of 19.2 per cent.

The lack of enthusiasm for business travel comes despite a bonanza for corporate travellers that has seen business-class fares fall more steeply than their economy-class equivalents as passenger loads have dropped. Recently advertised examples include $6655 on Sydney-London return business-class fare, $6619 for Sydney-Paris and $7762 for Melbourne-Los Angeles.

The lower fares have proven a disaster for airline bottom lines, as revenues have fallen at a significantly faster pace than passenger numbers. IATA says this is because premium tickets make up 7 to 8per cent of passenger numbers on international markets but 25per cent of revenues. This means the fall in revenue has been disproportionately higher than the drop in passenger numbers. “During March and the first quarter as a whole, we estimate revenues from premium passengers on international markets fell 35 to 40 per cent,” the association said in its premium traffic monitor.