Air fares likely to stay stubbornly high as travel-hungry Australians’ tastes change

International air fares are set to remain stubbornly high throughout the first half of next year, but the preferences of travel-hungry Australians are shifting. After the broad reopening of borders by mid-2022, international airlines have largely enjoyed bumper profits by operating fewer flights than an average pre-pandemic year, all while Australians’ pent-up demand for travel meant they were able to charge eye-watering amounts for tickets. Since then, international air fares have steadily decreased from record highs seen during the previous year. Average return economy air fares from Sydney to London currently cost about $3,000 for most of 2024, but rise to $3,500 and above during periods of peak holiday travel, according to flight aggregator site Skyscanner’s savings generator tool. Fuel prices and inflation are in part driving higher operating costs at Qantas, the airline’s chair, Richard Goyder, told the company’s annual general meeting on Friday. He said the airline had been absorbing most of the increased costs. “However, with sustained high fuel prices and a weaker Australian dollar, last month we increased fares by an average of 3.5% to recover some of this higher cost,” Goyder said. The long-term forecast for crude oil is US$85-$95 a barrel for the next 12 months, though the elevated margins enjoyed by refineries during the conversion to jet fuel have come down recently.<br/>