Costly international airfares for Australians need reform: travel agents

Australians are paying over the odds to travel to popular locations like LA or Singapore because of outdated government policies according to the peak travel body. Read how it could be fixed

Aussies are now paying sky-high prices for international airfares – in some cases up to 100 per cent more for tickets than pre-Covid – and Albanese Government policies blocking competition need to be urgently reformed, travel agents say.

The peak body representing the nation’s travel agents and tour operators has spoken out against Australia’s restrictive and “outdated” market policies – which are artificially driving up ticket costs for regular passengers and hark back to 1944.

Australian Travel Industry Association boss Dean Long says their own analysis of data from industry ticketing systems shows international airfares from Sydney airport in 2023 are up to 99 per cent higher than for the same period before the pandemic.

The association says travel agents still book 70 per cent of all international flights in Australia – similar to levels before the pandemic – although many agents now operate online instead of from shopfronts.

“We’re seeing demand outstrip our capacity – people are still wanting the support from our services when travelling - but we need more flights,” he said.

Aussies are paying over the odds to go on international holidays.

“We want to see cheaper airfares.”

Mr Long said some of the highest price hikes include Sydney to Hong Kong premium economy tickets selling for $853 – an 81 per cent increase.

Sydney to LA economy is now $1254, a 67 per cent increase.

Sydney to Singapore premium economy is $1057, a 59 per cent increase and a Sydney to Dubai premium economy ticket is $2224, a 99 per cent rise.

Because of Australia’s restrictive practices airlines are able to become sole price makers – boosting their profit margins on passengers without facing sufficient market competition, the association believes.

Mr Long said 57 airlines now fly into Australia – 11 per cent less than prior to Covid.

Australian Travel Industry Association chief executive Dean Long

“The current system determining which airlines can operate in and out of Australia was established in 1944,” said.

“This system was designed to protect the interests of national carriers which at that stage were largely government owned. While times have changed, the system has not.

“There can be no doubt capacity constraints on routes with strong demand have resulted in higher prices for Australian consumers.”

He said the number of seats on international flights was down by 13 per cent on 2019 levels - yet strong demand and capacity limits have allowed airlines, like Qantas, to achieve higher profits.

Airport slots need to be urgently reviewed and the Albanese Government needs to define the “national interest” when making decisions like the recent blocking of Qatar Airways’ bid for extra flights.

The association has also called for reforms to simplify consumer rights to refunds when flight are cancelled.

Australia has one of the lowest number of “open sky” agreements (which allow unlimited air rights) in the developed world.

Mr Long said we only have those arrangements with nine other market- compared with the US having more than 100 agreements, Singapore having at least 60 and Canada 23.

“Increasing capacity will not only help cost-of-living pressures on families and business, but it will also allow greater opportunities for Australians to travel internationally and for international travellers to visit Australia – bolstering our entire visitor economy,” he said.

Originally published as Costly international airfares for Australians need reform: travel agents