Australian travellers have spent considerably more on international journeys than they did four years ago, and despite calls for change, there seems to be little relief in sight.
Just two years ago, those seeking return flights to Europe for the summer season could secure them for as low as $1,400 each. Nowadays, snagging a seat for less than $3,000 is a stroke of luck.
According to Flight Centre's CEO, Graham Turner, those eager to depart the country for overseas adventures must keep digging deep into their wallets. Turner commented, "If you want to travel at Christmas, you should book now, or you'll have to pay a high price. Families are refraining from travel because you might encounter economy fares of around $4,000 for flights to Europe, and for a family of four, that's a significant expense, especially for those with limited incomes."
Europe retains its position as the most expensive travel destination for Australian flyers, with ticket prices soaring from 40% to a staggering 90% higher, depending on the destination. Travellers yearning for a Greek getaway face the heftiest price hike, with a jaw-dropping 90% increase compared to 2019 rates. The situation isn't any more favourable for Sydneysiders returning to Hong Kong, where economy class passengers are confronted with a colossal $853 ticket price for a one-way flight.
However, it's a somewhat different story for closer destinations. Fiji has seen only a 15% increase in fares, while Japan and Bali hover between 20% to 30% higher. Turner attributes the challenges in long-haul routes to Europe, the UK, and North America primarily to capacity constraints.
For domestic travellers, average ticket prices have risen a more modest 10% over the same period, although this is expected to shift as demand surges during school holidays, placing greater financial strain on those who need to fly.
COVID-19 and high inflation have added pressure to Australia's travel sector. Yet, experts consistently identify one core issue behind the surging airfares.
During a recent Senate probe into aviation, a former Qantas economist disclosed that ticket prices could drop by 10% to 15% if more airlines were granted permission to operate flights to Australia. This revelation coincided with growing frustration over the government's decision to block Qatar Airways from adding 28 additional flights into Australia in July.
According to Turner, who has overseen his travel agency empire since the 1980s, strict air service agreements have long hindered Australia's aviation industry. He asserted, "This has been a problem for a long time. America has open skies policies with a hundred countries. We've got it with nine, making ours one of the most restricted airline markets globally. We need more open skies, and then the market will decide. More airlines will fly to Australia, and prices will decrease."
Open skies agreements, or relaxed air deals, enable airlines to operate without route restrictions. Currently, Australia has open skies agreements with the US, the UK, China, India, Singapore, New Zealand, and Japan. Critics accuse the federal government of maintaining stringent air rules to protect the interests of local giants like Qantas and Virgin Australia.
Dean Long, head of the Australian Travel Industry Association (ATIA), criticized the "outdated" regulatory approach that hasn't evolved since 1944.
Turner believes that the government has backed itself into a corner with Qatar Airways and will eventually have no choice but to change its stance. He remarked, "I think the public is so concerned about the high airfare prices that they realise they will have no option but to let other carriers in. We could end up with more variety and more flights in the medium to long term, which could be a silver lining. However, it won't happen if the government continues to reject their applications."
A final report on the Senate's investigation into Australia's bilateral air service agreements is expected in October, with former Qantas CEO Alan Joyce and Qatar Airways slated to appear. Whether the government embraces change and opens up the skies remains the ultimate holiday surprise.
