Whinging about flight prices? You probably don't understand economics

Flights wouldn't be so expensive, if we didn't keep booking them...

On the plus side: they could get cheaper again sooner than you think....

Flights have never been so expensive, and we've never been so outraged. But whose fault is it?

Before you go down to your nearest airport with a barrel of petrol and a rag (seriously: don't), consider this: the eye watering flight prices of 2023 might not be due to an international cabal of airline executives deciding to screw us over, just for the hell of it. 

Airlines have never been charities. They've always existed to make as much money as possible. However, as someone who "does not understand economics" myself, I sympathise with anyone who is currently furious about flight prices.

If you aren't sufficiently outraged though, here are some statistics to make your blood hiss and steam.

Getting RSI from KAYAK and Skyscanner? You're part of the problem.

According to flight comparison tool KAYAK.com.au,  the average price for return economy airfare to Europe during the Northern Hemisphere summer in 2023 is $2,571. This is about a 63 per cent increase from the same period pre-pandemic and an approximately 46 per cent increase compared to the same period last year (and let's face it, flights felt stupidly expensive last year).

Thinking about booking a flight to Europe? You might want to wait at least a couple of months.

But, if you, like me, are complaining about them, you're probably part of the problem. Why? Because if you are concerned about flight prices, that's probably because you have been looking at booking a holiday (or have just booked one). 

Why does this make you the bad guy? Well, the reason airlines are charging so much is because they know we are going to book tickets anyway. If they weren't selling tickets, they would be lowering their prices. But that's not happening.

As Rico Merkert, Professor and Chair in Transport and Supply Chain Management at Sydney University tells Escape: "The air fares for flights to Europe are still so elevated simply due to supply and demand."

"There is still lots of pent-up demand for Australians who wanted to travel to Europe, Japan or the US during the COVID-19 pandemic but could not."

Further reasons for 2023's expensive flights include inflation, fuel prices, balance sheet repair and limited supply. As Mr Merkert tells Escape: "On the supply side, we have seen remarkable capacity discipline of the major players (i.e., Qantas as well as the middle Eastern and North American players) that aimed to repair those airlines' balance sheets (e.g., for fleet renewal programs) and some international players not yet operating again to Australia (i.e., the Chinese players)."

Mr Merkert says that this has opened up opportunities for smaller carriers. He said: "Things are so attractive right now that we have even newcomers such as Vietjet or Bamboo entering the Australian market, the latter being able to connect passengers from Australia through to Europe through its hub in Ho Chi Minh City."

Airfares are getting more expensive...and it's our own fault.

All is not lost, however. According to Mr Merkert, flight prices could fall back to earth as soon as June this year, due to supply ramping up, pent-up demand drying up and a forecasted mild recession leading to less disposable income.

He tells Escape: "It is fairly likely that - despite persisting inflationary pressures - fares will have to come down as soon as June/July this year. All of this assumes that jet fuel prices will stay where they are, as any spike in oil prices will have an impact on airfares."

If you don't want to wait and see if this prediction comes true, and are intent on booking a Euro Summer jaunt ASAP, KAYAK Brand Director Nicola Carmichael recommends you avoid the last week of July, and opt for August, if you want a cheaper flight.

“Travelling in August could be a savvy decision to help you save with the average return economy flight to Europe around $200 cheaper in August versus July, and $450 less for North America," Ms Carmichael says.

"Several popular destinations like Paris, London and Milan could be great choices as they are showing flight prices all below the Europe average, which is around $2,570 for a return economy flight at that time."

Another way to find a cheap flight is by setting alerts on flight booking tools like KAYAK or by using flexible search filters (i.e. by being flexible about when and where you travel).

Originally published as Whinging about flight prices? You probably don't understand economics