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Aussies to be slapped with high international airfares, experts warn

written by Hannah Dowling | October 14, 2021

Aviation experts have again warned that Australians attempting to return from overseas will be forced to pay extremely high airfares, which could continue for another year, as the industry slowly ramps up its operations.

It comes after industry bodies repeatedly warned the Australian government that airlines need to be informed well in advance when the country’s international borders will reopen, in order to adjust to new operating conditions, understand demand, and adequately prepare flight schedules.

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Instead, airlines were offered just over one month’s notice that Australia’s borders would be reopening.

Now, returning expats and Australians seeking to holiday overseas are set to face exorbitant airfare costs due to increasing demand for flights, and a shortfall of seats.

Over the last 18 months, many foreign airlines have temporarily exited the Australian market, while those that remained have been forced to run at a heavily diminished capacity due to caps on international arrivals.

This means that airlines are now attempting to ramp up operations, bring stored aircraft and stood-down staff back to the front lines at record pace, and attempt to navigate the Australian market following the removal of arrival caps for vaccinated citizens and residents.

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However, experts believe that after 18 months of limited cash flow, cash-strapped airlines, and the remaining uncertainties around flight caps for unvaccinated arrivals, airlines will be forced to continue operating at a diminished capacity, which will increase the cost of tickets.

Tom Youl, a senior industry analyst at IBISWorld, told The Guardian that “it could take a full year” for international flight schedules and airfares to return to pre-COVID levels.

“Because of the losses they’ve sustained over the pandemic, [airlines] need to be really careful about profitability,” Youl said.

He noted that foreign carriers likely “still haven’t figured out the rules and logistics” of Australia’s international reopening plan, with the government releasing little additional information on what this could look like, after this month announcing that vaccinated citizens and residents would be free to enter and exit the country as soon as November, and undergo seven-day home quarantine upon arrival.

With the information that is known, Youl said that initially, inbound and outbound travellers were likely to be those visiting friends and family overseas, as well as the return home of some of the nearly 45,000 Australians still stranded overseas due to the pandemic.

He went on to explain that demand for outbound flights could exceed inbound, due to the fact that Australia is not yet welcoming tourists, and will only allow vaccinated Australian citizens and residents to return to the skies.

“If there’s not an even demand in both ways, there’s less incentive for airlines to fully expand quickly, so we have to take them at their word that there will be a careful, staggered return to pre-Covid capacities.

“They’re going to want flights as full as possible.”

With that said, Youl predicted that Australians looking to holiday overseas from November will face the highest costs, and that airfares will begin to ease slightly from February, before continuing their slow reduction to pre-COVID prices over the course of the next year.

Late last month, it was revealed that Australians overseas hoping to come home before Christmas are likely to be disappointed as airlines slashed flight schedules and cancelled flights, with no new seats available.

The few airlines that have continued commercial services to Australia, including Singapore Airlines, have been forced to cancel flights and slash capacity due to the reduction in arrival caps, as Australia bunkered down to battle its COVID-19 outbreak in NSW and Victoria.

According to travel agents, this has caused Singapore Airlines to convert passenger services into freight-only flights, and the airline is no longer taking bookings for flights into Australia until March 2022 due to the restrictive passenger caps.

“This is the worst that it has ever, ever been,” said Perth-based travel agent Jennie Bardsley, stating that passenger arrival caps are now so restricted that it is now harder than ever to get home.

“No travel agent’s taking any new bookings,” she said, adding that it’s now impossible to book an Australian on a commercial flight home before Christmas.

“I can’t – it’s heartbreaking.”

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