On the back of extra capacity, Flight Centre’s corporate division has revealed that the average cost of international airfares across all carriers has recently fallen by as much as 10 per cent.
After crunching the numbers for key destinations, Flight Centre’s flagship corporate arm, FCM, found economy fares dropped by five to 10 per cent for the most recent quarter (July to September 2024), when compared to the year before. That’s the equivalent of over $100 per ticket, FCM says, with the biggest drops for Qatar, UAE, France, UK and Italy.
Meanwhile, business class fares also fell by four per cent – or more than $300 over the same period.
While international fares fell, the FCTG brand revealed that domestic airfares grew in Q3 (year-on-year) by three to five per cent – equal to an average $10-20 increase per ticket.
“We’ve seen a year on year drop in average international fares every month for well over a year now, so it’s more than just a trend; this is increasing stability in the travel industry,” Flight Centre Corporate Global COO Melissa Elf said.
“The biggest drops in economy airfares in the latest quarter are those into the UAE, Qatar, France, United Kingdom, and Italy.
“These are important routes, particularly for corporate travellers, with the Middle East being a hub for access to the rest of the world.”
Elf said the fall in Middle East fares was particularly encouraging given their position just a few months ago.
“In the first half of this year, the Middle Eastern and European countries were slower to follow in dropping fare prices, so it’s very encouraging news for travellers that countries like Qatar, UAE, France, Italy and Germany are topping the list over the last quarter,” she remarked.
“All of our key routes have seen steady decreases in the business cabin, with the USA and Italy coming out as the biggest winners, with drops of 10 per cent and eight per cent respectively.”
If approved, a recently announced deal between Virgin Australia and Qatar Airways could bring prices down even further, with the introduction of extra capacity and competition by mid-2025.
“There is a direct correlation between regions that were adding and welcoming airline capacity and the cost of travel decreasing,” Elf said.
“With demand into Europe, the Middle East, Asia and the US remaining high, it’s critical more flights and competition are added, and announcements like that from Virgin and Qatar, once approved, is the kind of thing the industry needs to ensure prices drop even further.”
Ms Elf stated the deal would also help with domestic fares as “it should free up aircraft to better service the domestic market”.
“A strong and competitive airline industry is good for everyone, so we’re confident this will mean cheaper fares and more travel destinations for Australians from mid-next year,” she remarked.
Elf noted that corporate travel is also crucial for winning business, attending events and retaining staff, with companies increasing travel budgets.
“Our customers have told us that 40 per cent of businesses plan to increase their travel this financial year, while 42 per cent of customers intend to increase their travel spend.”
