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Australian airfares creep up a little despite cheaper fuel

Fuel prices may be at their lowest in years, but that won't stop the average cost of domestic flying to increase in 2016, according to a new study.

Fuel prices may be at their lowest in years, but that won’t stop the average cost of domestic flying to increase in 2016, according to a new study.

An analysis done by Corporate Travel Management (CTM) found that Australian airfares will climb by around 2.7 percent (or $7.30) this year. This is in addition to the 2.9 percent airfare rise in 2015, which resulted in the average fare to reach around $271.

According to the report, the rise in travel cost will be a result of growing demand from Asian travellers and a slowdown in new capacity.

Local routes expected to be hit by the slight fare increase are Sydney-Melbourne; Sydney-Brisbane; and flights to Perth.

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Meanwhile, travellers looking to head overseas will enjoy steady airfares over the next 12 months, Herald Sun reported.

The report found flights out of Australia will either remain the same as last year or fall slightly as airlines add capacity out of the country.

This includes trans-Pacific services, which received several new flights late last year, including Qantas’ return to San Francisco; American Airlines’ first flights from Los Angeles to Sydney; and across the Tasman, Air New Zealand commenced services to Houston.

Aircraft upgrade from United Airlines and Air Canada has also made flying to North America more attractive and affordable for Aussies.

Emirates-Qantas

Fares to South America could also hold steady this year as Qantas fights off new competition from Air New Zealand.

There’s also additional services from Australia to the Middle East, with Qatar going up against Etihad and Emirates with new services from Adelaide and Sydney.

Clients looking to save even more when booking their flights 14 days in advance, according to CTM’s Australia and New Zealand CEO, Laura Ruffles.

“Our data tells us that by booking at least an extra seven days in advance, businesses could enjoy additional savings of up to 30 percent on domestic airfares.”

Laura Ruffles, CTM Australia and New Zealand CEO

Have you seen a slight increase in domestic fares?