Given the poor state of the Australian economy (it can only get worse), this is not the year to blow a lot of money on luxury items – and that will almost certainly include overseas travel. On my recent trip to Europe, I noted rates at hotels I use regularly in Spain and London were up by 25%. Airline prices post-covid have been outrageous – ripping off business class passengers in particular.

The excuses for high airfares as business boomed were undoubtedly valid in the early days – there was an apparent lack of capacity, trained pilots and experienced staff – and fuel costs were sky high – but those days are well over. Emirates recorded its best profit ever in the 12 months ended match 2023.

Singapore Airlines just announced its highest-ever quarterly operating profit. The Qantas Group earned $1.43 billion profit before tax to 31 December 2022, which is 49 per cent higher than the first-half record result achieved in FY18. Cracks will appear soon, though – my feeling is if you can wait 12 months, prices will have eased down towards the pre covid era. The message seems to have filtered through the cruise industry, where competition is increasingly fierce.

I get “special” deals just about every day via the Internet. The average domestic airfare is about 10 per cent higher than before the COVID-19 pandemic, while the average international airfare is more than 50 per cent higher. Nick Schroeder from IBISWorld expects the price of international airfares to start falling in the second half of 2023, adding that they could potentially fall to around pre-pandemic levels within 18-24 months. And a final note about the airlines using high fuel costs as an excuse.

Data from the International Air Transport Association shows that the price of aviation fuel has halved since peaking in mid-2022, and it is now priced at around the levels at which many airlines operated profitably in 2018. Pity this is not being reflected in the price of airfares in Australia.

Written by: Ian Mcintosh

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