Forget the hype, budget carriers are not the ticket to lower prices

The debut of Jetstar Asia flights between Hong Kong and Singapore this month has intensified the battle that started when another new airline, Valuair, started flying the route last summer.

However, despite the hype about budget airlines, the route's two traditional carriers - Cathay Pacific Airways and Singapore Airlines (SIA) - still offer the cheapest fares. In a sample period, their internet fares - before taxes and charges - were about $900 for a round trip, with Jetstar charging $1,000 and Valuair $1,250.

Taxes and charges have become the new small print, requiring careful attention. In this case, they take all the fares to about $1,500. Other critical information - the various conditions attached to these fares - is also in the small print. Essentially, the key information is no changes or refunds - use or you lose.

In the Singapore market, Jetstar's $1,040 roundtrip fare is the lowest, with the other three fares at a similar level - $1,200 on Cathay, $1,300 on Valuair and $1,300 on SIA. All exclude taxes and charges totalling about $400, and SIA's ticket requires two people to travel for that price.

Given the frills not generally available on budget carriers - frequent-flyer programmes, free food, cushions, blankets and inflight entertainment - then Cathay and SIA would seem to be the better buys.

How long will this situation last and what will happen next?