The Benefits of Competition and Technology

Here I am in Adelaide. Housesitting for a week at Glenelg, the beach suburb. I am on a 4th floor apartment with a bit of beach and water views. I am also close to the shopping strip and tram terminal. A lovely spot.

I had actually agonized over coming here. After wavering for quite a while, I decided to make the trip. Checked the fares and the cheapest was A$125 each way. And the flight times were convenient. You pay less if you fly at 6 am and more if the flight is at a more reasonable time. The price reflects the supply and demand for a seat at any time of the day. Better for the airline to sell a seat cheap than to have it unoccupied.

So one early morning after tossing in bed for a while, I got up at 4am to made my booking on the internet. The wonders of online buying – it is available 24/7 every day of the year. When I went into the Virgin Blue website, I was surprised to read that they had just started a sale. I managed to get my return flight at only A$85.

Little did I know that the next day, Jetstar (the no frill arm of QANTAS) would start its sale and the ticket would be on offer at A$69 if you have carry-on luggage only.

This is the clear benefit of competition in the airline industry in Australia. It is still a regulated market in the sense that airlines cannot simply come in and do business. The winners are people like who would not have gone traveling if not for the lower fares, as well as the tourism industry, especially the towns that the planes fly to. The downside will be the impact on the environment as more and more planes burn their fuel plying our skies.

Mind you, these low fares are available at a time of high petroleum prices.

Technology has enabled companies like Virgin Blue (thank you, Richard Branson) to create a low-cost business model. Customers buy and pay online, and check in online. I received an email 24 hours before my flight, telling me that I can check in. I made one click of the mouse and I see that I have been allocated a seat and I can change to another if I want to. I checked in two pieces of luggage. All done in a couple of minutes, thank you. At the airport, all I had to do was to drop my bag at the counter. Just a short queue.

Arrived at Adelaide airport. By the time I got to the carousel, my bags were there.

In true budget traveler spirit, I caught a bus to Glenelg.