Have you desperately been dreaming of a holiday far, far away from the shores of Australia?
But flights are priced way out of your budget so you keep waiting for a good deal to come around, while aggressively saving in the meantime.
Well, you’re not alone – a report from flight comparison website Skyscanner says more than one third of Australians are budgeting to spend more on travel.
Despite the cost of living, government figures show international travel has hit its highest level since the pandemic, with no signs of slowing.
Here we ask experts to explain why international airfares still cost so much, and share their tips on how to bag a cheeky low-cost getaway.
Why are flights so expensive?
The rising cost of fuel is the main reason, University of Queensland’s tourism and airlines expert Pierre Benckendorff says.
“The price of crude oil has been high from about late 2022 through to 2023 into 2024 … and fuel increases are often passed on to consumers,” Dr Benckendorff says.
The COVID pandemic also brought along other issues airlines have yet to recover from.
Not unique to the aviation industry, global supply chain issues are ongoing and the delivery of parts and maintenance services continues to be disrupted, says Dr Benckendorff.
Some other hangovers include airlines operating on a reduced fleet from having retired some aircraft, as well as dealing with unstable staffing levels following a massive lay-off over the pandemic.
Recurring COVID waves also pose the added challenge of having to replace crew members who test positive to the virus within a short time frame.
“Airlines will have to cancel the whole flight because they don’t have a full crew to fly the plane … so that’s why we’re seeing a lot of cancellations as well,” says Dr Benckendorff.
That causes a ripple effect as airlines incur various costs from needing to compensate and re-book passengers – and they would want to recover the losses, he says.
Cancelled flights also means fewer services are available and seats become limited – all while demand remains high – which then pushes up airfares.
“You have a big gap between supply and demand, which means airlines can charge more for those things.”
When will prices drop back to pre-pandemic levels?
They probably won’t.
Dr Benckendorff says it’s unlikely prices will fall below pre-pandemic levels because oil prices are forecasted to rise.
“They’ll continue to go up because oil is a scarce resource – we’re not going to find new oil.”
However, the price of oil has seen a steady decline in the last six months, amidst some fluctuations, and is now almost at the same level it was before Russia invaded Ukraine in 2022.
CommsSec chief economist Craig James explains that oil prices have eased in response to slower economic growth, especially in Europe and China.
However, other factors also influence oil prices and that includes slow global demand, increased supply from North America and wars in the Middle East and Ukraine.
The price of oil is also forecast to rise due to OPEC’s pledge to cut supply alongside stronger than expected oil demand growth.
What needs to happen for prices to drop?
Advances to technology to boost fuel efficiency, Dr Benckendorff says.
And while some aviation companies are already working on that, he says “airlines then have to upgrade their fleets and buy the newest aircraft to be able to benefit from that innovation”.
Aside from solving all issues the pandemic brought on, there also needs to be a significant reduction in operational and labour costs, he added.
But ultimately it boils down to crude oil prices and whether we can expect to see a decline, he says.
“Given all the other factors that are driving up airfares, it would be a small miracle if they came down to what we saw before the pandemic.”
Are people travelling less?
Ticket comparison website Skyscanner’s Travel Trends report says 75 per cent of Australians plan to travel the same amount if not more this year as compared to last year.
“Even when comparing post pandemic years, December 2023 to December 2022, our data shows that Australia has seen a substantial 44 per cent increase in flight bookings,” the company’s travel expert Jarrod Kris says.
“This shows us there is a continued rise in travel, one of which is unlikely to waver anytime soon.”
He believes there is a “bright outlook” for international travel and predicts a “return to normality” this year – and he could be right.
Data from the Australian Bureau Statistics showed that overseas departures surpassed 2 million in December 2023, a record high since the pandemic.
The number of Australians who have left the country for a short period has also increased by almost 30 per cent from the previous year.
So, how can I get the best flight deals?
Mr Kris says there are ways to be a savvy traveller and work around high airfares.
Bear in mind that Christmas and summertime in Europe (June to September) will always remain an expensive and busy period.
Here are his top tips:
- Be alert – Sign up for price alerts to get immediate visibility about price drops and additional discounts for your chosen destination
- Be flexible – Keep travel dates open where a 12-month view could help nail down the best time to make a booking
- Be inspired – Stay open to location so you can select those with the best deals
- Be an early riser – Flights with early/late departure times tend to be less popular but they may also have the best deals, with the hidden benefit of having free rows of seats to stretch out
- Mix and match – Book with different airlines on arrival and departure for hidden savings
- Be adventurous and change up your flight path – Direct flights tend to be more expensive so consider adding a stopover on the way
When is the best day of the week to book a flight?
Tuesday is the day to book, says Mr Kris.
That’s because most airlines seem to launch their discounts on Monday nights.
“Typically, you’ll save somewhere between 15 and 25 per cent,” he added.
He says flight prices go through a weekly cycle where the lowest prices are made available earlier in the week and increase towards the tail end of the week.
What are the cheapest destinations from Australia?
Here are the destinations with the cheapest one-way flights in January — prices vary depending on when and where you choose to fly out of and into.
- New Zealand
- United States
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