On the runway: Airfares to fall further as airlines head for pre-Covid levels
Business and leisure travel demand was expected to reach 85 per cent of 2019 levels this year and airfares would soon fall further, according to Flight Centre’s FCM Consulting.
Air fares were expected to fall later this year (file image)
Its latest global trends report said domestic booking trends for corporate travel in the first three months of this year were up 27 per cent in online adoption.
“After 2022, a year full of significant imbalance of supply and demand, air travel will stabilise this year, seeing added capacity in the first half and airfares moderating in the second half,” FCM’s general manager Felicity Burke said.
“Early forecasts show air capacity offers in 2023 will be just 2.5 per cent short of 2019 volumes. The region with the highest seat growth in the first quarter was Asia with a 12.1 per cent increase, with most other regions averaging 2 per cent growth.”
However, Europe was an exception. Capacity fell there by 8.7 per cent, but Burke expected the northern summer would drive demand in the second and third quarters.
“Interestingly, when you look at the city pairings, business class airfares have dropped and some quite significantly. The perfect example of this is Auckland to Sydney, which has decreased by 24 per cent in January and February when compared to the same months in 2019.”
The report follows data this week from the Australian Bureau of Statistics showing Australians continue to flock to overseas travel as prices fell. Arrivals into Australia however were now below departures.
