Average airfares to New Zealand, Japan, the United States and the Middle East fell by more than 20 per cent in the first quarter (Q1) of 2024 compared to the same period last year, as international capacity from Australia virtually reached 2019 levels, Flight Centre Travel Group data has found.
According to new figures released by Flight Centre Corporate’s FCM Travel and Corporate Traveller, overall international and domestic air capacity reached pre-pandemic levels for the first time in Q1 – and cheaper air travel is the winner.
The FCTG data shows flights to Qatar experienced the biggest fare drop, with the average cost of a Doha-bound flight in Q1 from Australia falling by 25 per cent from $2,519 (Q1, 2023) to $1,888.
Airfares to New Zealand fell the next most, by 23 per cent from $1,176 to $901.
Meanwhile, airfares to the United Arab Emirates dropped by 22 per cent, while average prices from Australia to Japan and the US for the quarter decreased by 21 per cent.
Other notable fare falls were seen for flights to the UK (-18 per cent), China (-17 per cent) and Singapore (-15 per cent).
Unsurprisingly, airfares fell as capacity rose. Leading the way among seat increases from Australia (compared to pre-pandemic capacity) were flights to Japan (130 per cent) and Qatar (109 per cent).
Lower fares to continue
“As of this month, and for the first time since the pandemic, we have reached aircraft passenger seat capacity that is above or beyond pre-pandemic levels globally,” Flight Centre Corporate Global COO Melissa Elf said.
“This means that across the world we have as many seats available to passengers as we did before 2019.
“We’re seeing this directly correlate to decreasing airfares, which is great news for our corporate travellers, who rely on travel to keep their businesses ticking, and win new work.
“An analysis of key international routes for Australian travellers has found fares on some routes dropped by up to 25 per cent, and with more and more capacity and competition being introduced to the market it’s a trend we’ll continue to see throughout the rest of the year.”
Business boom
According to Elf, the Global Business Travel Association (GBTA) forecasted a 27 per cent rise in business travel in 2024 in Australia.
“It has also revealed that in 2024, for every US$1 spent on business travel, a business would see a US$145 return in sales,” she stated.
“We still have some countries that are lagging in their international and domestic capacity, but some that have come back stronger than ever before.
“It’s evident in the data that the airlines and airports with the highest levels of capacity are seeing the best rates for passengers.”
While not above pre-pandemic levels just yet, Elf said the sector expects international flights out of Australia to hover at around 98 per cent of 2019 levels for the next six months.
“It will also vary depending on the port of departure – for example, international seat capacity out of Perth is at 111 per cent, and Sydney is nearing full capacity at 97 per cent,” she remarked.
“We’re seeing promising signs that this will be a long-lasting trend, thanks to new international capacity announcements like recent ones from Delta Airlines, Singapore Airlines, China Southern and Jetstar.
“It’s certainly a complex landscape, and this data shows us just how critical it is to have a travel management company on your side that can find you the best deal across a multitude of airlines, lock in the most convenient route, advise on the best time to travel and maximise travel benefits.”
Earlier this year, FCM Travel and Corporate Traveller data revealed that average international economy airfares across all carriers fell by 12.9 per cent in the second half of 2023, compared to the same period the year before, for an average saving of $280 per ticket.
In February, FCTG Leisure CEO James Kavanagh also said some business airfares to Los Angeles and London had been slashed compared to recent levels.
In the same month, Australian Competition and Consumer Commission (ACCC) data revealed that after reaching record highs in late 2022, domestic airfares fell on the whole last year.
