Low-Cost Carriers Continue to Pressure Traditional Players to
Bring Down their Prices
Debt Consolidation And Credit The average cost of airline tickets fell in 2003 by 5.4 per cent
overall, as the acceptance of low-cost carriers by
business travellers increased,
according to an annual benchmarking study done by BTI Canada of
150 of its corporate travel clients. The Canadian study also
revealed that the average cost of domestic and transborder
airline tickets decreased by 9 per cent while international
airline ticket costs declined by slightly less than 1 per
cent.
The monetary policy committee (MPC) decided to cut the base rate by a quarter percentage point earlier this month, bringing the rate down from 5.75 per cent to 5.5 per cent. For credit card and mortgage holders the move brought some welcome relief, backed by the members of the MPC, which sets the base rate for the Bank of England. All nine members agreed to push through the rate cut, which the minutes revealed was set against the context of "restrictive" interest rates.
Check Credit Rating "Low-fare carriers in the travel
market have definitely
solidified their presence in the marketplace," said Michele
Ferrari, Senior Vice-President Client Management at BTI Canada.
"The acceptance of low-fare carriers by corporate travellers
have forced dominant "traditional" airlines to rethink their
fare and distribution models, and to continue focusing on
maximizing yields instead of adding flights to capacity."
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Improve Credit Rating According to Ferrari, in just one year, low-fare carrier ticket
purchases have risen from 7 per cent to account for more than a
quarter of airline-flow revenue in Canada.
The figure was higher than increase in February and broadly in line with the previous six month average, the BoE said. However, month growth rate weakened to 10.2%, from 10.3% in February. The increase in consumer credit of .3 billion was much lower than in February and credit card lending increased by .2 billion in March compared with .5 billion in February. Other loans and advances rose by .1 billion (down from .8 billion in February). The annual growth rate of consumer credit continued to fall, to 7.5% in March.
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"Business travellers appear to be
considering these low-fare carriers, and are prepared to forego
service and schedules for the price and value that these smaller
airlines tend to offer," she said.
Rates for credit cards will continue to increase next year, financial experts at Moneyfacts have claimed.
Credit Score Rating Scale BTI Canada's Benchmarking Study is a semi-annual report that
measures corporate travel activity booked by BTI Canada. The study
is unique to the Canadian market as key Canadian business travel
industry trends are identified and analyzed.
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Bad Card Credit Credit People According to the study, the airline industry in Canada
experienced considerable change in 2003 as factors like Air
Canada's bankruptcy protection filing and geo-political issues
contributed to the fluctuation of ticket pricing, trip lengths and
purchasing habits. Ferrari said that concerns about the residual
war in Iraq, SARS, the major blackout that swept across the North
Eastern Seaboard, ongoing international and transborder terrorism
concerns and the Avian Flu all continue to hinder full recovery of
the travel industry.
Free Credit Rating Report Although domestic travel was high in the first half of 2003, it
was the only market segment to decrease overall during the year,
and fell by 3 per cent to its lowest level since before 2000.
Credit Rating Scale Study results also showed that the average gap between Self
Service Reservations (SSR) and non-SSR bookings decreased through
2003. The average ticket costs for SSR bookings were generally
lower, between 1.5 per cent (intra-US) and 11.5 per cent
(domestic). Ticket cost savings averaged between $140 and $250.
Bad Credit Rating "As more and more low-cost carriers are introduced into the SSR
booking and data capture process, this gap will likely widen by
2004," Ferrari said.
Credit Rating Agency The study also found that the average overall hotel rate
increased by 0.5 per cent from 2002, to $145.09. Domestic hotel
rates fluctuated during 2003, as the first half of the year slid
1.2 per cent and the second half rebounded with a 1.6 per cent
increase. Overall domestic rates remained status quo at
$122.75.
Credit Rating Canada According to Ferrari, a positive economic outlook and increased
business travel in the second half of 2003 contributed to overall
gains in the hotel sector, as hoteliers raised prices slightly with
this increased demand.
Bad Credit Mortgage Rating Other key study findings include:
Good Credit Rating --The average overall car rate paid decreased $2.25 (or almost
4.5 per cent) to $49.21 from 2002. Overall, the domestic market
accounted for an 11 per cent drop in the average rate paid, which
contributed to this sector's decline.
Credit Score Rating Chart --Overall average cost per mile decreased to $0.47 from $0.49 in
2002 and $0.51 in 2001.
Credit Mortgage Rating Poor --The average domestic trip length decreased more than six
hours. International stays diminished by approximately 12 hours,
whereas intra-US travel increased slightly from 2.14 to 2.18
days.
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