Santa Claus will take to the skies in his sleigh this Christmas but for many Australians, airfares have reached such levels that holiday season air travel is out of the question.

Airlines are understandably keen to return to profit after the ravages of the pandemic. It’s happening faster than predicted as fares rocket.

Airfares this year are “outrageous”, Jennifer Cooper, owner of Queanbeyan City Travel and Cruise, told the Guardian.

“People are not travelling for Christmas,” she said. “They can’t afford it.”

Some Aussies are driving or catching coaches and trains. Others are getting into debt to bag airfares at any cost and catch up for the first time since the start of the pandemic – while another contingent is just calling the whole thing off.

The latest quarterly ACCC report on domestic competition in the Australian airline market says average revenue per passenger, an indication of average airfares across all fare types, was 27% higher in October 2022 than it was in October 2019 before the pandemic. The current holiday season fare spike will have pushed this higher still.

The Guardian recently interviewed a family who have already held their Christmas get-together. They brought the extended family together to celebrate Christmas in November because the prospect of travelling over the holiday season was prohibitively expensive.

Earlier this month, Lonely Planet received the following question: “I’m in Australia and was hoping to fly from Sydney to Adelaide for Christmas, but flights are so expensive. I’ve seen prices in excess of AU$1000 ($670) round-trip. Is this normal? What’s going on?”

The answer involved pent-up demand, soaring fuel prices and reduced capacity. Advice included “consider postponing your travel until January”.

In similar fashion, international airfares have gone ballistic as the Christmas/New Year peak approaches, reportedly having doubled on some routes in just a few months.

The Qantas group now expects to achieve an underlying profit before tax in the first half of next year of between $1.35 billion and $1.45 billion. That represents a $150 million increase to the profit range given in early October 2022.

The International Air Transport Association (IATA) expects a return to profitability for the global airline industry in 2023 as airlines continue to cut losses stemming from the effects of the pandemic to their business in 2022.

IATA points out that the expected profits for 2023 are “razor thin”.

“But it is incredibly significant that we have turned the corner to profitability,” says IATA director general Willie Walsh.

“Passengers are taking advantage of the return of their freedom to travel. A recent IATA poll of travellers in 11 global markets revealed that nearly 70% are travelling as much or more than they did prior to the pandemic. And, while the economic situation is concerning to 85% of travellers, 57% have no intention to curb their travel habits.”

Written by Peter Needham

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