Ian Douglas

Yeah, absolutely.

And it's something we've been watching all year, really, with the problems that Rex has had, that there are parts of Australia that are absolutely reliant on air service.

But if you look at the Australian market, which is quite a large one,

30% of it is just on Melbourne, Sydney, Sydney, Brisbane or Melbourne, Brisbane.

Half of it is taken up if you just add Adelaide and Perth into that mix.

And then there are large numbers of much smaller city pairs, so much more vulnerable where there's perhaps a daily flight or three or four flights a week that might now become uneconomic when the fuel price doubles.

Yeah, and it will be impacting demand as well because as the airfares have gone up to reflect the fuel cost, it will change people's travel patterns a little bit.

So I'd expect to see lower demand and as a consequence of the lower demand, a cutback in flying in any case.

Yeah, I'm not sure I'd call it an excuse rather than a reason.

Given that the price of fuel makes up such a large part of the total cost, there will be some markets that were profitable before that now aren't.

But if you're covering the direct operating costs, you might...

hang in there and wait for things to improve.

There'll be other markets that were really marginal before that perhaps you were hoping would produce over time some improvement that have become so uneconomic that you would effectively be paying customers to fly, that you'd be spending more than on just fuel and the crew than the total airfares on board.

In that case, it would not make sense to keep flying in some markets.

Yeah, even though the cost of fuel has gone up, there will be days of the week, times of the day that are relatively unattractive.

But the aircraft needs to fly from Sydney to Melbourne at 6 o'clock in the morning to be in Melbourne to operate a primetime business flight back at 7.30 or 8 o'clock in the morning.

So in that situation, you will still price more aggressively on less attractive flight times and put sales in that will be focused perhaps more on Tuesday afternoon or Thursday morning, which is much less attractive for business travel.

So the market's behaving normally just reflecting the cost of fuel in the average fares that are out there.

Yeah, I guess it's very hard to predict what's coming next.

It changes day by day, week by week.