Jim Eagles: The price is right now

The cost of international air travel just keeps falling.

Four months ago I wrote a column pointing out that the cost of flying overseas was lower than it has ever been. Since then it has fallen even further.

Statistics New Zealand's International Air Travel Index has been declining steadily for 21 months.

When the index was first calculated, in September 1985, it was at 1158. Since then it has fluctuated around that level and, for instance, by the end of 2002 was at 1115.

But then the air wars, and particularly Air New Zealand's new value-based fares, started to take effect.

By the end of last year the index had fallen to 933. The latest figure, to the end of June, shows a drop of another 12.6 per cent to 815.

This is amazing stuff. How many things can you think of that are 30 per cent cheaper than they were 20 years ago?

If you allow for changes in earning power since then, the real cost of paying for a flight overseas is now less than half what it was in 1985.

What are we waiting for? Why are we sitting here shivering and growing mould? Why aren't we all lying on some tropical beach? Well, increasingly we are.

This June, which is the latest month for which figures are available, a record 168,960 New Zealanders went overseas on what are referred to as short-term departures, which basically means winter escapes and business trips.

That's 39 per cent higher than the figure for June a year before. And it's more than double - 124 per cent up, to be precise - the total for June 1994.

You have to think that most of that increase is people fleeing our winter for sunnier climes that are suddenly more affordable. Flight Centre reckons "a lot of people who previously felt overseas travel was out of their reach are now taking family holidays abroad".

Regional advertising leader, Karen Munro, says the new cheap fares to Australia and the Pacific, and cheap packages to many Asian resort destinations, initially produced a big increase in numbers going to traditional destinations such as the Gold Coast, Fiji and the Cook Islands.

But "as Fiji and Rarotonga have become full due to the cheaper air fares ... the likes of Vanuatu, Samoa and New Caledonia are becoming more popular, and resort destinations in Asia such as Malaysia and Thailand have also become popular alternatives". And, she adds, "Bali is also firmly back on the map as a holiday destination."

United Travel general manager John Willson says the cheapness of travel to Australia means gateway destinations such as Brisbane, Sydney and Melbourne "are now considered to be almost domestic destinations".

More and more people were flying to Australia - United's bookings there are up 40 per cent - but increasingly they were heading for more remote areas, such as the Northern Territory, or to join cruises.

Willson says United is noticing a change in the sort of holidays being booked. "Many people are still spending the same amount on their holiday but because they're spending less on their flights they're able to upgrade their hotel accommodation or perhaps take a cruise instead."

The lower fares are also leading to more impulse travel.

East Tamaki House of Travel operator Katrina Cole has noticed a definite trend for people to take weekend breaks, such as a shopping trip or to see a show, often arranged at the last minute.

"People are becoming more used to impulse buying, where they see a deal advertised and take it up purely on price, for travel in the next few weeks."

Those impressions are supported by the travel statistics for June. Places like Fiji, Cook Islands, Samoa, Tonga and, of course, Australia all saw the number of visitors from New Zealand jump by at least 25 per cent compared with the same month a year before.

But the number going to places like Indonesia - presumably mainly Bali - Malaysia, Thailand, Singapore, China, Hong Kong and Taiwan all went up by at least 50 per cent and, in the case of China, by 198 per cent. Travel to North America and Europe, which had been dropping a little, is benefiting as well.

Alison Kearney, from House of Travel Howick, says the arrival of new carriers, particularly Asian airlines, has resulted in more competition and cheaper airfares on those long-haul routes, as well.

"An airfare to the UK now starts from $1899 whereas the low season used to be $2199 ... which makes it much more affordable for people to travel".

Again, the statistics confirm that, with the number of people taking a trip to Europe jumping 30 per cent in June, and the number aiming for the Americas up by 40 per cent. There are several influences at play here - the economy is doing well, New Zealanders feel better off, security fears are receding - but the continuing fall in airfares has to be the key factor in making it possible for more people to travel abroad.

The only cloud on the horizon is the growing government enthusiasm for offsetting those cheaper airfares with higher departure taxes and security charges. But, for now, let's enjoy it while we can, and head for the sun.