Airfares could fall 'in the coming months'
Aussies looking to fly to their dream destination should hold off on booking their ticket until airfares come down more.
The cost of an airfare within Australia has come down from the historic highs we saw at the end of 2022, but they are still too high, according to the Australian Competition and Consumer Commission (ACCC).
The ACCC’s latest Airline Competition in Australia report revealed airfares hit a 15-year high in December 2022.
“While it’s positive to see airfares fall from record highs in 2022, passengers are still generally paying more to fly today than they were before the pandemic,” ACCC commissioner Anna Brakey said.
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“Airfares typically come down after the Christmas travel peak, due to a seasonal decrease in demand, however some of this reduction is also explained by the airlines increasing their seat capacity.”
The industry made 5.9 million seats available for travel in January 2023, the highest in more than six months. Qantas flew at 102 per cent of its pre-pandemic capacity, Virgin at 96 per cent and Jetstar at 84 per cent.
Price of fuel falling
A major contributor to airfares was the price of fuel, which skyrocketed in mid-2022 due to the war in Ukraine.
The ACCC found the price of fuel was 35 per cent lower at the end of February 2023 than it was in June 2022.
“The price of jet fuel has been trending down, which should enable airlines to reduce airfares further in coming months,” Brakey said.
Airlines performing better
Aussie airlines’ on-time performance also improved in January 2023. The industry reported 23.9 per cent of flights arrived late during January.
The ACCC said most airlines had improved their delay and cancellation rates over the past few months.
Jetstar’s performance was relatively worse, reporting the highest rate of delayed (34.6 per cent) and cancelled (7.3 per cent) flights in January.
“The airlines generally managed to increase their levels of flying without significantly compromising their on-time performance,” Brakey said.
“After extensive operational challenges for much of 2022, most airlines appear to be getting closer to their pre-pandemic capability.”
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