More seats, cheaper fuel cut airfare costs for | Australian Markets

Cheaper jet fuel and more seat availability have pushed down costs for Australian jetsetters and the price aid is predicted to proceed.

Domestic financial system airfares have been 12 per cent cheaper within the first two months of 2025 than the identical time final yr, knowledge compiled by company journey advisers FCM Consulting reveals.

That represents $29 off the average ticket price.

The price drop comes regardless of the Australian Competition and Consumer Commission claiming restricted home competitors was serving to the nation’s dominant airline teams – Qantas and Virgin – enhance their revenue margins.

While Qantas Group earnings earlier than tax soared to $1.5 billion within the final six months of 2024, and Virgin Australia additionally introduced report earnings, market dynamics because the new yr have benefited travellers.

Globally, jet fuel is down virtually 17 per cent in comparison with the 2024 average, pushed partly by financial uncertainty from Donald Trump’s trade warfare curbing demand for oil.

Fuel is the most important working price for airways, so fluctuations circulation by to airfares.

Ongoing weak spot in jet fuel costs will proceed to put downward strain on airfares in coming months, the ACCC predicts.

FCM Consulting director Felicity Burke stated Australia and the broader Asia-Pacific area had skilled sharper drops in fares in comparison with the remaining of the world.

“We’ve been saying for a long time now that global capacity increases and other factors like jet barrel cost reductions would go hand-in-hand with airfare price drops in various regions, and this is one of several reasons that we’re now seeing this come to fruition,” she stated.

Airfares for the “golden triangle” route between Melbourne, Sydney and Brisbane remained pretty flat – a consequence of larger demand ensuing within the fewest spare seats between the most important capitals.

Prices shot up post-COVID as airways struggled to keep up with a sharp rebound in demand however have moderated as more seats have been introduced online.

Global capability in May was seven per cent larger than 2019 and 5 per cent larger than the identical time final yr.

International financial system airfares out of Australia dropped 5 per cent in January and February in comparison with the identical period final yr, whereas business class tickets fell three per cent.

More routes are set to launch within the second half of this yr, with Virgin’s partnership with Qatar Airways including additional competitors on the highly-trafficked Australia to Europe hall.

“Through this partnership with a world-leading global airline, we expect to not only create more choice for travellers but also drive healthy competition, which typically helps to place downward pressure on fares over time,” a Virgin Australia spokesperson stated.

Qantas may even launch new routes in late 2025, together with Adelaide to Auckland and Perth to Auckland and Johannesburg.

Cases of vacationers being detained and deported by US border security have spooked travellers.

Graham Turner, the chief government of FCM proprietor Flight Centre, stated leisure journey bookings to the US dropped by up to fifteen per cent within the first three months of the yr.

But it has had little impact on airfares to the US which fell by about three per cent, largely consistent with the remaining of the world.