Will QAN survive?, page-5455

"People may not be scared to spend money" but as NAB has suggested, they're being more discerning.

Travel is allegedly becoming a lesser priority, ranking below items such as school fees.

This won't immediately affect airlines, given bookings are made in advance especially for leisure travel but it may show up by about May in terms of loadings (i.e. percentage of seats occupied).

If the airlines start to have a bit more difficulty reaching their revenue targets per flight (yield per passenger x number of posteriors on board), fares will have to reduce. That's what QAN would fear domestically.

Internationally, more competition is gradually returning to departures from Oz. AirAsiaX wasn't present six months ago:it is now. The mainland Chinese airlines are slowly returning, albeit with low initial weekly frequencies, although carrying more students than Chinese holidaymakers as the latter are deterred by perceived high airfares.

The further interest rate rise to be announced at 1430 today won't affect every consumer or business but it is all about perceptions. Sometimes a herd mentality takes over and people gradually close their wallets and purses.