Airlines still offering discounts

Etihad Airways is targeting "dual-income, no kids" couples with last-minute fare deals to destinations in the Middle East, India and UK.

ABU DHABI // Airlines are offering discounts even as the busy summer travel season approaches, in a sign of how deeply the global downturn has affected the industry. Etihad Airways is targeting "dual-income, no kids" couples with last-minute fare deals to destinations in the Middle East, India and UK. The promotion is part of a weekly rolling offer every Monday and Tuesday this month for travel within a two-week period. This week, the promotion includes return flights to Beirut for as little as Dh40 (US$10.90) and London for Dh200.

Conditions apply, however. A spot check on the Etihad website showed that a ticket to Beirut during the travel period works out to Dh825, including fuel surcharges and taxes, while London tickets were Dh1,350 after fuel surcharges and taxes. Nevertheless, they represent significant savings on the standard fares, which are often more than twice as much. "This online sales promotion has been introduced to boost ticket sales for the month of May, the global aviation industry's quietest month," said Iain Burns, the vice president of corporate communications of Etihad.

The airline's rolling offer will choose different destinations each week for discounted fares, according to the company. Travel agents said travellers could look forward to similar offers from competitor airlines, claiming Etihad's discounts were significant enough to prompt a reaction from other Gulf-based long-haul carriers. "Airlines can't allow another carrier's fares to drop so low," said Premjit Bangara, the travel manager at Sharaf Travel in Dubai. "We anticipate Emirates and Qatar Airways will join the bandwagon."

Emirates Airline already has several promotions available, according to its executive. But he said a price war was unlikely. "We have no plans to imitate our competitors' marketing initiatives," said Khalid bel Jaflah, the vice president of commercial operations at Emirates. Etihad first began offering low-season promotions in January. The latest deal was unusual, travel agents said, because airlines typically raised fares at this time of year as they entered the busy summer travel season.

"In a normal cycle, May, June and July is peak season and you would not encounter any promotions," said Mr Bangara. "It's a little different this year. It is a last-minute market and people are waiting for rates to drop. As a result, airlines are reducing fares right now to at least get business locked in straight away." Etihad was following the low-fare travel deals offered by budget airlines, said Housam Raydan, the corporate communications manager at Air Arabia, the low-cost airline based in Sharjah. "It is gratifying for us because we were the first to introduce this concept into the Middle East," he said.

Etihad's discounts come as Middle East airlines are forecast to lose $900 million this year because of the fall in demand, the International Air Transport Association (IATA) has said. Globally, IATA reported shrinking passenger markets in March, with first and business-class tickets down more than 20 per cent from a month earlier. "March is normally a good month for many factors, with significant holiday travel. However, compared with this time last year load factors were down a very sharp 5.4 per cent," it said.

Penny-pinching among corporations and individuals during the economic downturn has hit premium travel the hardest, traditionally a key revenue stream for airlines. First-class ticket sales have been worst affected while business class is down an average of 15 to 20 per cent, said Mr Bangara. Economy class has picked up significantly, although it has not matched the levels of one year ago, he said.

"Airlines are going to struggle to make profits in the current economic environment but generating income from seats that might otherwise go empty at such short notice will at least help to curb costs," said David Kaminski-Morrow, an editor at Air Transport Intelligence, based in the UK. * additional reporting by Anealla Safdar [e-mail] [e-mail]