Expect airfares to increase soon, say experts and airline bosses

Major airlines are reducing services and increased airfares are next, says one expert.

Expect airfares to increase soon, say experts and airline bosses

Airfares are about to rise, says one expert, with the increasing price of oil forcing airlines to reduce services to Australia in order to recoup costs.

For the first time in 14 years, the number of seats sold on planes has dropped – the first time summer capacity has dropped since 2005, according to The Age.

The fallout of these reduced runs means higher fares are on the horizon, says Airline Intelligence and Research consultant Tony Webber.

“[The airlines are] being more rational now, which is really good news for Qantas and Virgin,” said Mr Webber.

Airline bosses agree that the rising cost of jet fuel will lead to higher airfares.

“Oil is our second-largest expense. So when it increases, the cost of air travel increases,” American Airlines chief executive officer Doug Parker said at last year’s International Air Transport Association annual meeting in Sydney.

“I would expect you would see higher fares to consumers over time.”

Would you be likely to plan a holiday before airfares become more expensive?

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    COMMENTS

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    8th Jun 2019
    12:22pm
    There used to be a fuel levy. When the fuel price dropped, I believe Qantas did not pass it back to customers and merged it into their airfares leading to a massive jump in profits and massive Bonus for A.Joyce. Thus, when the fuel price increases, I believe ACCC has a clear responsibility to watch and investigate the price-fixing behaviour of this large company which seems to operate as they please to benefit their CEO and other greedy interests.
    KSS
    8th Jun 2019
    1:44pm
    Agree.

    And in any case there will be no flights if the strike action goes ahead, so the airlines won't be spending on fuel right?
    Anonymous
    8th Jun 2019
    7:49pm
    I haven't heard yet whether strikes are definitely planned, and whether strikes by some airport workers will affect the flights or not.
    On the other hand, price rises are guaranteed after the media has been advised to put out such statements by Consultants as in this article. So time for the ACCC to start looking at what's happening, not sleep as they do about petrol pricing.
    Eddy
    8th Jun 2019
    5:59pm
    Impending prices rises is hardly news, happening all the time, why should air fares be different. You cannot expect senior executives salaries and bonuses to remain stagnant do you. Someone getting $17 million per annum this year wants $18 million per annum next year. It is the law of supply and demand (I think). Of course when workers at the other end of the pay spectrum want a better share of profits they help generate they are branded greedy, lazy and irresponsible.
    bobm
    8th Jun 2019
    7:20pm
    Simply wonderfull. Left for London a month ago price of oil around $78 per barrel. Arrived home a month later oil price shows at $53 a barrel. The airlines scream price increases!!!. It would be good if Qantas could get their luggage to the right person at the checkout and not lump it onto one of the other party with in the group. Secondly the obese people who take up their seat and half of yours Qantas queried, could not give two tosses about the problem, however one obese person was moved from the exit row as per the safety rules, and did he complain to the press in Geelong. Qantas at least had the balls to move him. He didn't like it one bit and blamed everyone for the move, not to be obese in himself
    The bosses like an increase in their salaries.


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