How can AirAsia sell an international flight for $ 12?

And what does this mean for frequent travelers?

This morning, the low-cost carrier AirAsia launched a sale on flights between Avalon (the other Melbourne airport) and Kuala Lumpur. For the dates from December 2018 to August 2019, seats are only $ 99.

What is truly amazing is that only $ 12 is actually the price. The rest includes taxes and airport fees.

For your $ 99, you will not receive checked baggage, seats or meals. If you pay with a credit card, you will also be hit with a $ 10 handling fee. It's always an insensibly cheap price.

Obviously, there is no way for an airline to make a profit when it charges $ 12 for an 8-hour international flight. So, how is this sustainable? AirAsia is eager to promote the new route, which she launched earlier this year, and she will undoubtedly benefit from subsidies and rebates from Avalon itself. But even that will not make a $ 12 tariff viable, so what gives?

First, AirAsia is doing everything possible to whip up those extras like seats, meals and luggage. Here is what appears as soon as you select a flight:

In this case, the Premium Flex option of $ 274 serves a specific purpose: to encourage passengers to opt for the Value Pack of 63 , $ 40. This is what is called the "lure price".

Second, noting your return flight may not always be as cheap. I've seen many examples where the return to Avalon was a similar price, but there are dates when the price goes up.

If you are trying to build a balance of points with Qantas or Virgin, then it may seem like little to serve you even if you are based in Melbourne. However, it should be kept in mind that you can take a super cheap flight to Kuala Lumpur and then move on to a reward flight to another place. Malaysia Airlines is a member of the oneworld alliance and often offers good rewards, so it is an option that Qantas travelers might consider.

Angus Kidman's Chronicle Results reviews new developments and research that help you save money. make wise decisions and enjoy your life more. He regularly appears on finder.com.au

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