Flight Centre CEO Graham ‘Skroo’ Turner has said that airlines “will certainly try” to recoup the massive losses seen throughout the pandemic in their airfares, however, Australia’s competitive market should ultimately see airfares remain fair on busy routes.
“If you look at the way airline fares had been over the last 50 years, it’s generally been very competitive … so I don’t think they’ll have much choice. On competitive routes, they will have to be competitive,” the Flight Centre boss told Sky News Australia.
Domestically, Turner said that competitive airfares will remain low for the medium-term, with the results of this already being seen.
“We’ve spoken to quite a few of the airlines, and they think that … it’ll become quite competitive quite quickly,” he said.
Skroo added that Qantas’ monopoly of the domestic market could see an impact on prices, particularly if the airline does attempt to raise fares.
“I think you’ll see plenty of good fares with Virgin and Jetstar in particular. I think Qantas will be looking for a bit of a windfall domestically, but I don’t think the fares will be that expensive.
“There’ll be plenty of off-peak fares and that they come back with a really good value.”
Australian airlines now continue to beef up their flight schedules and capacity and are even preparing to add new aircraft to their fleet to account for an increase in demand for air travel post-pandemic.
With this in mind, Skroo said that capacity should continue to strengthen, with a meaningful recovery to be seen “probably in February or March”.
“So then, the fares will be pretty good,” he said.
However, for international routes, passengers could expect to see a “pandemic tax” on airfares and pay a higher rate than before the pandemic for now.
Turner said that “premium airfares might hold up fairly high” for international travel, as airlines seek to recoup losses, however like domestic travel, he added that economy fares will likely come back to pre-pandemic levels on more competitive routes.
International airfares may also be impacted, should foreign airlines delay their return to the Australian market after nearly two years.
It follows numerous warnings that foreign airlines may opt not to return to Australia in the short-to-medium term, given the uncertainty posed by the confusing and ever-changing nature of travel restrictions.
In September, the Australian Airports Association (AAA) flagged serious concerns over the industry’s inability to adequately prepare for the restart of international flights, given that airlines need to prepare schedules well in advance.
“Some international carriers are either already drawing down capacity or preparing to withdraw from Australian ports altogether,” the association said, noting this could have a “significant” impact on Australia’s reopening plans.
“Given the aviation industry has long [six to 12 months] lead times for carriers and airports to re-establish international routes, significant planning will need to occur now to ensure airports and airlines are ready.”
AAA chief executive James Goodwin said, “If [airlines] don’t know what the rules or protocols will be for Australia eight or nine months from now, we could lose them for 2022. Then we’re looking at 2023.”
“The reality is, when we are ready to open up, we may not have as many airlines as we were used to. We may find airfares will be more expensive and we may find we have difficulty getting tourists into Australia.”