Flight Centre’s FCM says business-class airfares are getting ‘cheaper’ as airlines ramp up flights

Flying at the front of the plane is becoming more affordable as pre-pandemic international capacity returns, demand from cashed-up travellers eases and the leisure boom settles.

Flight Centre’s FCM Consulting expects business-class flights to get cheaper in and out of Australia over the remainder of 2024.

Business-class airfares to and from Australia are falling closer to pre-pandemic prices as airlines continue to ramp up international operations and as a leisure boom settles down.

Analysis from Flight Centre’s corporate division, FCM Consulting, which counts Optus, Wesfarmers and Toyota as clients, shows that the cost of flying in business is 12 per cent more expensive in the first quarter of 2024 than in 2019 – compared to a gap of 18 per cent a year ago.

Economy-class prices were more stable, falling from 12 per cent in the past year to 11 per cent above 2019 levels, according to the Global Quarterly Trend Report.

Easing price rises come as a flurry of airlines including Qantas, Emirates and American Airlines plan to add more flights in the coming months, helping to lift international capacity from 97 per cent to level with pre-pandemic capacity by the end of the year.

Qantas is adding more international flights in the months ahead. Picture: Supplied.

FCM Consulting APAC director Felicity Burke told The Australian that business-class airfares had already softened in North America and she expected more routes out of Australia would continue to get cheaper throughout the year.

“In 2022 and 2023, we had a lot of leisure travellers that were using flight credits and opting to use them up in business class, which didn’t leave much room for corporate travellers who were being asked to pay $23,000 for those last-minute trips if any seats were available at all,” she said.

“Now there’s more choice. That rush of leisure travellers, that pent-up demand, is softening and is freeing up a few more seats in business class. I think it will definitely be more affordable for corporates for the rest of the year.”

International capacity was expected to reach pre-pandemic levels in the months ahead. Picture: Qatar

Business class flights remained 2 per cent higher than 2019 levels in Europe, while North America was up 9 per cent and the Middle East by 14 per cent.

The latest Bureau of Infrastructure and Transport Research Economics report for February showed that total seats made available on international scheduled operations to/from Australia during the month was 4.17 million compared to 4.23 million in the same period in 2019.

Flight Centre analysis showed the cost of flying between Sydney and Auckland was 20 per cent more expensive in economy than in 2019, but 61 per cent cheaper in business.

Sydney to Singapore remained 5 per cent more expensive in economy and 3 per cent cheaper in business, while the average ticket between Los Angeles and Sydney in economy was on par with 2019, but 26 per cent more expensive in business class.

Ms Burke said inflation and the cost of aviation fuel were also ensuring that flights were more expensive than 2019. She added that there would be volatility in prices with airlines using tactical specials to drive demand if forward bookings were soft.

Singapore Airlines plans to launch a fifth flight daily between Sydney and Singapore later in the year.

“There is tactical pricing that Qantas and Virgin do now, where they will put a sale on if forward bookings on a particular route in a couple of months’ time are quiet,” she said.

“We expect to see more pockets of discounted pricing coming into the market. We’ve seen Qantas and Virgin increase their domestic fares over the last five months, and so if they see demand soften domestically they may put out a tactical special to lift loads.”

Data also showed that Melbourne to Sydney flights cost 3 per cent more than 2019 in economy and 25 per cent more in business class.

Analysis by The Australian showed that the cheapest one-way flights between Melbourne and Sydney on June 18 included $149 for Qantas or $112 with Virgin Australia on a fare with checked baggage. Rex offered flights between for $109 with bags and Jetstar was the cheapest at $80.

Airlines such as Emirates offer a bar for business class travellers. Picture: Getty Images

Qantas will continue to expand its international airlines past pre-pandemic levels as it adds extra services to Singapore and Manilla later this year, while it will start flying Sydney to Paris via Perth in July with its Boeing 787-9 aircraft.

Emirates has announced that it will resume flights from Adelaide using its Boeing 777 fleet in October and Singapore Airlines is increasing flights across the country including a fifth daily flight from Sydney to Singapore. American Airlines and Delta Air Lines will start seasonal flights from Brisbane to Dallas and Los Angeles respectively later this year.

“The Australian market will creep back up to 100 per cent of normal capacity over the course of this year,” Ms Burke said.

“Airlines globally are in an expansion stage with the northern hemisphere summer very busy, so when we look at our summer, it’s likely to play out here at the end of this year as we’ll see the carriers coming online.”

Flight Centre data showed that Qantas operated more flights in 2024 compared to 2019 Virgin Australia, controlled by Bain Capital, was about 10 per cent off its pre-Covid level.