Experts warn that the golden era of cheap flying is over in Australia

The days of cheap airfares and low-cost travel are behind us, with one aviation expert warning: ‘We have had the cheapest fares we are ever going to have.’ Find out why.

The golden days of cheap airfares and low-cost travel are a thing of the past, with aviation experts warning high prices are here to stay.

“The days of low-cost travel are no longer with us,” airport economist UTS professor Tim Harcourt said.

“It is more like the ’70s, where long-haul flights are out of reach for most people.

“Airlines are jacking the price up. They know people are desperate to travel because there is pent-up demand from people who have not flown for three years.”

And while passengers were feeling the pinch, Prof Harcourt said: “I imagine airlines quite like the situation as it is at the moment.”

Airport economist Tim Harcourt says high airfares are here to stay. Picture: Hollie Adams

His comments on international fares come after ACCC chair Gina Cass-Gottlieb warned: “After about 18 months of historically low airfares, the cost of domestic flying has risen sharply in response to strong demand, temporary capacity reductions and very high jet fuel prices.”

Aviation expert Peter Harbison, chairman of the CAPA Centre for Aviation, said there were several reasons for the increase in costs, including a dramatic drop in the number of business travellers who traditionally subsidised cheaper tourist seats.

“When that business travel falls by half you remove 40 per cent of your revenue for a flight, those travellers were subsidising the rest of us going on holiday at the back of the plane,” he said.

“If you don’t have those travellers then the rest of us have to pay more.”

This, coupled with the rising cost of fuel, brought on by the war in Ukraine, and the impact of inflation on the US dollar, has helped push the price of a business class flight from Sydney to New York up from a pre-Covid low of $10,000 to almost $30,000.

“We have had the cheapest fares we are ever going to have,” Mr Harbison said.

“These high prices are going to be here for the long haul.”

Qantas says high fuel prices and demand for travel are pushing up seat prices. Picture: AFP

Airlines are also struggling to “wake up” and make ready aircraft that were put into hibernation in the desert for the duration of Covid.

Qantas has a fleet of 10 giant long haul A380s but so far only four are in service, with the rest progressively due to return to service by the end of next year.

Staff were also laid off during the pandemic, with many unwilling to return or unable to because of the tax implications on their redundancy payments.

In his October update Qantas chief executive Alan Joyce said high fuel prices and demand for travel were pushing up seat prices.

“You are seeing some increase in international airfares. I think it’s happening worldwide, because there is this lack of capacity that’s out there,” Mr Joyce said.

“The airfares have to be up, because we’re seeing fuel this quarter is 76 per cent higher than it was pre-Covid.”

A Virgin Australia spokeswoman conceded prices were high, but said there were tricks to securing a cheap seat, including booking early and flying mid-week between Tuesday and Thursday.

“We have seen huge demand as Australians get back in the air to reconnect with friends and family and enjoy the wonderful travel experiences we all missed out on during the pandemic,” the spokeswoman said.

“So where it is possible, we encourage our customers to book early to secure the best price possible.”

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