Christmas Cheap Flights: High Demand, Declining Capacity, Fuel Costs Soar Domestic Flights

The days of cheap flights are long gone.

Prices are skyrocketing in the run-up to Christmas, giving Australians a headache. Travelers are warned not to expect prices to return to “pre-Covid” levels in the near future.

Airfares on some of the most popular routes have more than doubled thanks to a perfect storm of demand, reduced capacity and soaring fuel prices.

“It’s basically a ‘pre-Covid’ and ‘post-Covid’ situation,” said Dr David Bierman, a tourism expert at the University of Technology Sydney.

from Melbourne to Sydney, most popular Fares for the world’s busiest domestic airline, which carried 2.12 million passengers last year, are soaring.

At the time of this writing, the cheapest overnight return flight from Melbourne to Sydney departing next Monday is currently around $452 on Jetstar and $357 for a one-way ticket.

If someone needs to fly out on Friday, the cheapest overnight round-trip ticket is $599 on Rex.

On the other hand, an overnight round trip from Brisbane to Sydney next Monday is $278 on Rex and $185 one way.

A flight from Brisbane to Cairns is the third busiest domestic flight and costs $416 round trip and $116 one way on Jetstar.

For the fourth route from Brisbane to Melbourne, the cheapest round-trip overnight ticket on Monday is $526 on Rex and $256 one-way on Jetstar.

Need to fly from Sydney to Perth next week? Good luck. The cheapest round-trip ticket is $1345 on Virgin, $693 one-way.

This is more than three times the pre-Covid levels.

“From the early 1970s to 2019, air fares were declining year-on-year, especially on highly competitive routes,” says Dr. Beirman.

“For example, when I started working in the travel industry in 1981, a round trip from Sydney or Melbourne to Perth was around $1000. The same thing was happening on many routes to Europe and Asia, Covid put Kaibosch on many of them.”

In 2020, 2021 and early 2022, the sheer number of restrictions imposed on airlines has made them “losing money with their fists.”

Qantas lost around $7 billion in 2020-2021, which is in line with many airlines around the world.

“On top of that, most airlines are cutting a lot of staff,” Dr. Beirman said.

“So when travel resumes in 2022, people who have been traveling for a long time will be waiting in line. It caused problems.”

When air travel resumed earlier this year, some airlines were offering low fares to incentivize the market, but “it didn’t last long.”

Airlines have had to offer higher wages to attract these workers back, driving up costs as fuel prices rise.

“Add to the fact that almost all airlines are heavily indebted, and, of course, airfares are rising,” he said. “This is not just an Australian problem, it’s a global problem.”

A stern warning before the Christmas holidays

Despite soaring airfares, 60% of Australians plan to fly in the next 12 months, up from 49% in December, according to comparison site Finder.

This includes 29 per cent planning to travel within Australia, 15 per cent planning to travel internationally, and 16 per cent planning both domestic and international travel.

“Travel is back and a lot of people want to fly, even though the prices are so high,” said Angus Kidman, a travel expert at Finder.

“Australians considering flights should be prepared for prices to skyrocket until at least mid-2022, especially on international flights.A trip to Europe could cost thousands of dollars during that period. there is.”

Kidman warned that anyone trying to book a flight home for Christmas will already end up paying double the price.

“It’s always been expensive to fly at Christmas. That’s nothing new post-pandemic,” he said.

“If you haven’t booked a flight yet, expect to pay a high price. A one-way ticket from Sydney to Melbourne normally costs $150, but is now selling for over $300. There are some relatively cheap seats if you go first thing in the morning or later in the evening, but at this stage it’s not cheap to book a flight over Christmas weekend.”

Delaying your trip after January 10th may result in a lower rate.

“With high demand, airlines have less incentive to offer sale fares,” he said.

“Why risk selling cheap seats and paying hotel bills with unhappy customers when canceling flights due to staff shortages? Qantas has been very outspoken about this, In a recent results update, it said it intended to “recoup the rise in fuel costs fully with fares”. No major company plans to expand it until mid-2023. “

Kidman said if travelers have a destination in mind but the fare is too high, they can set up fare alerts to notify them whenever the fare changes.

“Booking sites like KAYAK and Skyscanner offer this,” he said.

“Weekend flights, Friday through Sunday, are often the most expensive and most in demand. If you find a cheap international fare, grab it now.”

He added: This ensures that cancellation costs are covered, including those that the airline may not cover, such as prepaid accommodation. “

According to the Australian Competition and Consumer Commission, domestic air fares have surged this year as airlines curtailed their ability to deal with staffing shortages and the cost of jet fuel rose.

The cheapest economy class airfare in August was 56% higher than April’s 11-year low, according to the Consumer Watchdog’s quarterly report released last month.

Business air fares increased 17% from June to August.

ACCC Chair Gina Cass-Gottlieb said in a statement, “After about 18 months of historically low airfares, domestic flight costs are rising due to strong demand, temporary capacity cuts and very high jet fuel costs. Prices rose sharply in response.

“August discounted economy airfare hit a record high in almost two years.”

Nearly 4.7 million passengers took domestic flights in July this year, the highest since the pandemic began, and accounted for 89% of passenger numbers in July 2019.

Travel to Queensland was especially popular in July 2022.

The number of passengers flying between Canberra and the Gold Coast has almost doubled since July 2019. Travel between the Gold Coast and each of Melbourne and Adelaide also outperformed pre-pandemic demand.

“Demand for leisure travel, especially from people in colder southern states, continues to drive a recovery in passenger numbers,” Cass-Gottlieb said.

“Demand for routes between Canberra, Melbourne and Sydney has lagged, partly due to a slow recovery in corporate and business travel.”

Watchdog noted that many consumers complained about record delays, high cancellation rates, lost luggage, and long wait times at call centers.

“We have been working closely with the airlines to understand the causes of these issues,” said Cass-Gottlieb.

Rex has far outperformed other airlines in terms of punctuality and cancellation rates, and we attribute this to the fact that we have been able to retain staff despite fewer flights over the past two years. increase.

“Airlines are expected to honestly and proactively inform passengers about the reasons for flight delays or cancellations, how consumer guarantees apply and their entitlement to other compensation,” Cass-Gottlieb said. ” he said.

Dr Beirman said travelers can expect prices to remain high “in the coming year.”

“The rough numbers are probably 10 to 20 percent higher than pre-Covid,” he said.

Longer term, however, “the market will start to rebound at higher fares,” Dr. Beirman predicts.

“From Sydney to London, from Sydney to Los Angeles, I think competitive pressure is likely to drive some airfares down on some of the major domestic routes. [or they will] We lose passengers,” he said.

Christmas Cheap Flights: High Demand, Declining Capacity, Fuel Costs Soar Domestic Flights

Source link Christmas Cheap Flights: High Demand, Declining Capacity, Fuel Costs Soar Domestic Flights

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