Why Australians are paying 50% more for air fares than pre-pandemic even as jet fuel costs drop

Australian international air fares have surged by more than 50% above pre-pandemic levels, new data shows, even as the cost of jet fuel plunges, creating a tailwind for airline profits and source of frustration for travellers. Analysts link the apparent discrepancy between high fares and falling costs to profit maximisation, with airlines including Australia’s national carrier Qantas, in no hurry to give up the extra income. Data from flight search company Kayak shows the average return economy international fare from Australia is now $1,827, compared with $1,213 in 2019. The most popular routes include flights to London, Bali, Tokyo, Paris and Los Angeles, according to analysis conducted for Guardian Australia. Average domestic ticket prices are up a more modest 10% over the same period. Tony Webber, an aviation analyst and former chief economist at Qantas, said that air fares were only indirectly driven by an airline’s operating costs, with pricing primarily driven by customer demand and capacity. “Airlines have still not returned to flying internationally at their pre-Covid capacities, and they’re aware of how strong demand is,” Webber said. “They’re recovering capacity and bringing down air fares, but they’re doing it passively and slowly because they know they’re making money.”<br/>