Airfares between Australia and Europe are expected to drop by early 2024
Airfares between Australia and Europe are expected to drop to pre-pandemic levels early next year.
Andrew Stark, Flight Centre’s global managing director, said about 85 per cent of seats are being sold — which is a good sign for lower airfares.
“We are starting to see airfares coming down slowly and are months away from seeing them at the same price in March 2020,” Mr Stark told news.com.au, speaking specifically to Flight Centre deals.
“It’s a slow grind, but things are certainly coming down.”
He said Flight Centre forecasts suggest a five per cent decrease on airfare prices each quarter, which will see the same airfares we saw pre-covid.
“Europe airfares out of Australia around February and March next year are under $1600 which is a good indication as you wouldn’t have got that price six months ago,” he said.
Mr Stark said the reason behind lower, international airfares is due to more capacity coming back.
“What drives prices down is more seats — but it takes airlines time to bring back capacity, crews and pilots.”
“We know travel hurt the most in Covid and a lot of skill was lost, so airlines are trying to win it back — it’s certainly a slow burn.”
Mr Stark said it takes roughly one year to get an aircraft out of hibernation and into the sky with factors including logistics and operations.
For example, major airlines like Air New Zealand, Qantas and Singapore Airlines, stored aircraft in “graveyards” during the pandemic — but they’re all making a comeback.
As of May this year, all seven of Air New Zealand’s 777 aircraft that were in the California’s Mojave Desert, are back in the skies.
“Having all of our 777-300s back will help build more resilience and more seats into our international operation, meaning we can fly more customers to where they need to go – whether that’s San Francisco, Honolulu, Houston or Tahiti,” Air New Zealand’s chief operations officer Alex Marren said.
But even she agreed it hasn’t been an easy task getting aircraft out of storage.
“An incredible amount of work has gone into bringing these aircraft back,” she said.
“The reanimation of OKM alone has taken more than seven weeks and involved more than 1500 man-hours of work.”
However, with more aircraft out of hibernation and airlines, such as Virgin Australia, adding to their fleet, both domestic and international routes will see a drop in prices.
Mr Stark said flight deals and early bird offers are another indication.
“As demand starts to slow, competition starts to ramp up,” Mr Stark said.
“We’re seeing flights to LA on Air Canada for around $1,000 and to New York for about $1600 — 10 months ago they would have been $1,000 more.
“Europe is looking under $1500 and the UK under $1600, so we’re certainly seeing it come back to pre-Covid prices.”
Mr Stark said, however, if Qatar Airways was given the green light to add 28 weekly flights to the 28 it already operates — market prices would have been even more competitive, and a lot sooner.
“I think it does have an impact on the market. If there’s more seats in the market it certainly brings down prices,” he said,
“We would have seen it sooner rather than in the next six months.”
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It comes after Flight Centre boss Graham Turner slammed the government for its decision to block the Middle Eastern airline from expanding its network in Australia.
Mr Stark added that the more people that travel, the more it stimulates the economy such as creating more jobs and at Flight Centre, they will “always advocate for more seats”.
However, he reiterated “prices are gradually coming down and we should have price parity by next year”.
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