Travel Has Returned, But Low Airfares Have Not

TD Guest Writer

Guest Writers are not employed, compensated or governed by TD, opinions and statements are from the specific writer directly

The Australian Competition and Consumer Commission predicts that high costs will continue through 2023, despite recent statistics from the Australian Bureau of Statistics showing that tourism is on the upswing.

It’s no secret that international arrivals and departures have increased in the last half a year. However, even though 77% of travellers still report feeling unsure about taking an international flight in the wake of the COVID outbreak, the numbers have recovered to the level they were in February of this year: 1.52 million.

Since Chinese citizens were also not allowed to leave the country until recently, arrivals from other countries have stepped in to fill the void. Unsurprisingly, New Zealanders accounted for the largest group, with 91,210 visitors, Brits with 55,410, and Americans with 51,220.

Due to the recent changes in China’s COVID restrictions, it is expected that the total number of international students studying in Australia will increase dramatically. Despite the significant increase in 2022, the annual intake of Chinese international students is still very beneficial to Australian educational institutions, especially universities.

While this is all good news for prospective holidaymakers, there is a silver lining in rising airfares, which appear to have no end in sight.

Global aircraft capacity has increased in the previous year. Still, travel costs have followed suit, according to aviation analytics firm Cirium, which estimated that a ticket to Europe is up 21% from pre-pandemic levels.

Domestic flight prices have also risen, prompting the Australian Competition and Consumer Commission (ACCC) to mandate that they be constantly monitored.

According to new statistics from the Bureau of Infrastructure and Transport Research Economics (BITRE), while airfares have decreased and discounts have grown since Christmas, prices have remained high despite increasing demand and reduced network capacity.

The report comes as the competition authority has placed the industry on notice for late 2022, signalling that it would be monitoring domestic airlines to ensure more seats and flights are provided in an effort to bring down prices, which reached a 15-year high in December.

The COVID pandemic had a clear impact on airline supply, with challenges in employee numbers and flying capacity, resulting in prices being 27% higher than in 2019.

The Qantas group controls over 60% of the domestic market in Australia, whereas Virgin Australia controls approximately 33% and Regional Express 5%.

Bonza Airlines was formally cleared to fly last week but needs more market clout to push down airfares because it only serves rural routes with little capacity.

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