Virgin chief hopes airfares will rise

Virgin Blue chief Brett Godfrey says he hopes airfares will return to stronger prices soon.

Addressing the Queensland Media Club on Thursday, Mr Godfrey said airfare prices, particularly international business, had fallen during the global recession.

"At the moment, particularly internationally, it’s (low prices ) not sustainable; there’s no doubt about that," he said.

"When you can get to the US for about $1200, when 15 months ago at this time of year you're were looking at $2800 to $3000, something is wrong.

"Clearly we’d like to see a return sooner rather than later (to pre-recession prices).

"And we will. It’s not that we’ve got too much capacity there. It’s just that the market has fallen off."

He said the market was not getting worse, but a detailed market update would be announced at next week's Virgin AGM.

The Pacific route connecting Australia and the US has gone from being one of the world's most profitable to a loss-making exercise for airlines over the past year.

But recently a Virgin Blue's group public affairs manager, Heather Jeffery, told Traveller that the strategy for its Pacific route airline, V Australia, was not to drive up fares.

It came on the back of analyst predictions that fares on the route would increase after V Australia was given the go-ahead by the Australian Competition and Consumer Commission for a tie-up with the route's other new player, Delta Air Lines.

Qantas was continuing to have success on its US flights, helped in part by the popularity of its A380 superjumbo service.

Passenger demand for flying on the world's largest airliner was allowing Qantas to charge up to $600 more than its rival on return flights to Los Angeles.

However, Qantas chairman Leigh Clifford recently mirrored Mr Godfrey's comments at the company's annual general meeting in Perth last month. He told shareholders that while the airline had heavy bookings, it was hard to make money with fares discounted as heavily as they were.

- AAP