Overseas airfares poised to get cheaper as Qantas, Singapore Airlines boost capacity
Airfares could fall by more than 10 per cent on key routes into Europe next year as airlines move to offer much needed capacity to international destinations.
Australians will benefit from cheaper international airfares over the coming year as airlines look to enter or add seats into the country at a time when capacity is behind pre-pandemic levels by nearly 500,000 seats per month.
Airlines such as Qantas, Singapore Airlines and Thai Airways are set to add more flights in the coming months and players such as Turkish Airlines will enter the market and potentially drive airfares down by more than 10 per cent.
After a controversial decision by the government to block Qatar Airways from flying more aircraft into Australia earlier this year, industry sources say the Doha-based carrier could be preparing to apply again in the new year for permission to boost capacity.
The latest data from the Bureau of Infrastructure and Transport Research Economics (BITRE) shows there were 3.86 million seats available in September — a deficit of 450,000 seats from September 2019, or the equivalent of 928 fully-loaded Qantas Airbus A380 aircraft with 485 seats.
Despite this, the number of seats in the market was 60.8 per cent more than a year ago, while seat utilisation was down 5 per cent from September 2022 to 83.9 per cent.
Flight Centre chief executive Graham Turner said the availability of seats into Europe and the Middle East remained 70 to 75 per cent below pre-pandemic levels.
“For the UK you know you need to book three, four, five, six months ahead to get (seats). If you’re going in peak season like May, June, July to the UK you’ll need to book early regardless to get a seat and you’ll be paying fairly high prices,” Mr Turner said.
“Once we really get competition on these major routes … it’ll both bring down airfares and increase capacity.”
“So that’s what we’re hoping for by the middle of next year that we’ll have sufficient capacity and lower airfares and that’s good news for us and good news for travellers.”
Government data showed it currently remains hard to get a seat into Australia from Europe, with Qantas and British Airways having loads greater than 90 per cent on all flights, while Emirates and Qatar Airways services, from Dubai and Doha respectively, were operating with loads of 95 per cent.
This compared with flights to New Caledonia with Aircalin and Qantas having about four in 10 seats vacant.
Recent data from Webjet shows on Melbourne to Los Angeles flights travellers have been paying 65 per cent more for a return economy fare this year compared to pre-Covid, and Sydney to London is 40 per cent more than pre-Covid.
In a potential move which could slash airfares to Europe by more than 10 per cent, Transport Minister Catherine King this month approved the ability for Turkish Airlines to fly 21 flights per week between Turkey and Australia with immediate effect, and eventually will be able to do so 35 times a week.
Mr Turner said the decision to pave way for Turkish Airlines will help to drive down airfares to Europe.
“We worked out that when Qatar wanted another 28 flights, that it would probably have about a 15 per cent decrease in airfares and the same happened when they went into New Zealand so this added capacity (which) should have the same impact,” he said.
Turkish Airlines told The Australian in June services would operate from Istanbul via Singapore using Boeing 787-9 aircraft until it could ultimately be flown non-stop when new generation ultra-long-range aircraft become available to do the 17-hour flight.
Qantas expects to be at 100 per cent of pre-Covid capacity by March as it increases Melbourne-Singapore from 10 flights per week to two daily and goes daily to from Sydney to Shanghai. It is also resuming flights to Port Moresby from Sydney in April and to Paris from Sydney via Perth next July.
Singapore Airlines plans to add three further flights per week from Adelaide next October, while Sydney will be upped to five times a day.
Thai Airways will resume daily flights between Bangkok and Perth from March, China’s Hainan Airlines will go daily to Sydney from Haikou next week and Jetstar will fly to Seoul and Osaka from Brisbane in February.
Melbourne Airport is the only major Australian airport to have exceeded pre-pandemic capacity with the addition of thrice-weekly flights to Mumbai with Air India from this month. Brisbane Airport on the weekend recorded its busiest day since 2019 with more than 20,000 travellers passing through its international terminal.
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