International airfares tipped to increase as demand from Australian travellers soars

Australians looking to travel overseas soon are being warned to expect ticket prices to increase even further on some routes as airlines struggle to meet pent-up demand for flights.

The nation’s international borders are set to reopen over the coming months, with Prime Minister Scott Morrison announcing on Friday all Australians will be allowed to leave the country from the start of November without having to receive special permission.

Australia is also scrapping quarantine for fully vaccinated international arrivals into New South Wales, though the move will initially only apply to citizens, permanent residents and ‘immediate’ family members.

But University of Queensland travel expert Pierre Benckendorff said as demand for international travel increases, so too will airfares.

“What we’re seeing here is that supply is still low. The airlines are trying to build up their routes and ramp back up to full capacity … but demand is pretty soon going to exceed supply so that will push up prices,” he said.

“That’s why we’re already seeing some high prices.”

Victorian resident Caroline Campbell paid $10,000 for return flights between Melbourne and New York for herself and her two sons flying out in early December. Including her husband’s ticket, which they’re yet to book, will set them back another $5,000.

The mother-of-two said she had no choice but to pay the “insane” amount because it’s been two years since she’s been able to see her parents in the United States.

“It makes me sick to my stomach to think about that, that amount of money being spent on flights,” she said.

“It’s not a trivial amount of money for us – but at the same time if I don’t go now, and I miss the opportunity to see my parents for another six months or so, I think it will be something I would regret.

“I would rather spend the money on investing in memories and experiences that we will have now in our lifetime, then, you know, even though I could probably buy a car for that money!”

Steve Hui, the chief executive of travel group iFLYflat, is predicting prices will go up further into early next year as travel resumes.

“Right now, I think (airlines) just want bums on seats, get everyone flying again and as soon as they start getting more planes out … they will have to start charging higher prices to recover those costs,” he said.

Mr Hui said prospective travellers should book now while airlines still have pandemic-related flexible change and cancellation policies.

“If you’re booking cash in the event that something happens and things change, you’ll be able to cancel and probably get your money back,” he said.

Dr Benckendorff said at the moment, flights between Australia and countries including India, the United Kingdom, and the United States were among the most sought-after and priciest.

“We’re seeing some higher prices between Australia and India because there are strong family ties between those two countries. There’s a lot of pent-up demand from people wanting to get back to Australia or over to India,” he said .

“And we’re seeing relatively high prices between Australia and the US, and Australia and the UK because of those links and cultural ties as well.”

Data provided by travel booking site WebJet to SBS News showed the top 10 most booked international destinations for travellers from Australia between 8 October to 14 October were: London, Los Angeles, Amsterdam, Bangkok, Dublin, Manchester, Singapore, Vancouver, Denpasar, and New Delhi.

However, prices are not higher than normal on all routes.

“On some of the holiday routes, we’re actually seeing some really good deals. On those leisure routes where they can’t rely on the business market they’re keeping their prices low to try and encourage travellers back,” Dr Benckendorff said.

Dr Benckendorff expects it will take “most of 2022 for the airlines to ramp their operations back up to normal”, with prices starting to stabilise in the second half of next year.

Three factors will determine how quickly prices return to normal, he said: “how quickly the business market recovers, because that’s where the airlines make most of their money, the second thing is quarantine requirements [for international visitors and tourists], and the third thing is fuel prices”.

“Because fuel prices are increasing at the moment, and they’re expected to increase at least until the end of this year, and possibly early next year … fuel is the biggest cost for any airline, so if the price of fuel goes up they put their airfares up to compensate for that.”

Source: sbs.com.au