Flights are more expensive than ever

[wendlle]

Just looking at flights and boy I've never seen Domestic flights so expensive before. I thought there would be some good deals but nope. $2000 return to take a trip to the Gold Coast from Canberra (2A 2C) I just can't afford that.
Such a shame I can see my Gold status isn't going to be around for much longer

 

[Milefest]

The $5 ambient food boxes and room temperature white wine isn't enough to tempt you? How about the petrol station sandwiches in the lounge?

 

[wendlle]

LOL, the lounge isn't even open in Canberra! I do however enjoy the extra luggage allowance and "line skipping" with the kids however.

 

[jb747]

Economy of scale is gone. I think it's going to be a long time before fares average out to anything like their previous levels. Especially international fares.

 

[Freq Flier 2013]

Does that mean with higher prices we will get better service and food - once all this settles down.

 

[antycbr]

Does that mean with higher prices we will get better service and food - once all this settles down.

Unlikely. The airlines that survive this including QF will be carrying so much debt that they’ll need to cut costs anywhere they can.

 

[MEL_Traveller]

Just looking at flights and boy I've never seen Domestic flights so expensive before. I thought there would be some good deals but nope. $2000 return to take a trip to the Gold Coast from Canberra (2A 2C) I just can't afford that.
Such a shame I can see my Gold status isn't going to be around for much longer

What's the normal fare?

I've just checked 2A2C and get $1344 on most days/dates for CBR-OOL... still seems expensive!

 

[Melburnian1]

wendlle, your claim is not what BITRE just suggested in respect of a previous month.

However with a quick non-exhaustive search, I agree that flights of QFd and VAd seem mostly very expensive.

 

[Must...Fly!]

I think it's a relatively temporary phenomenon. Flights were always expensive during school holidays, but with relatively limited places you can actually travel to, it means that during a peak time such as now popular destinations that are open are more popular than ever.

Edit: throw in that flying direct is even more in demand due to possibility of sudden restrictions and relatively limited transit options...

 

[hossein_au]

When I moved from Melbourne to Canberra in 2012, booked a couple of months in advance, the least expensive QF ticket was around the $99 mark and VA's was around the $79 mark (on way). Over the years the prices crept up and just before COVID, the cheapest QF ticket was around the $189 mark and VA's was around $169. That is around 90% increase over 7-8 years. I am not sure if they have any appetite to flatten "that" curve.

 

[dajop]

When I moved from Melbourne to Canberra in 2012, booked a couple of months in advance, the least expensive QF ticket was around the $99 mark and VA's was around the $79 mark (on way). Over the years the prices crept up and just before COVID, the cheapest QF ticket was around the $189 mark and VA's was around $169. That is around 90% increase over 7-8 years. I am not sure if they have any appetite to flatten "that" curve.

2012 was right in the middle of the QF/VA capacity war. Since then both have respected each other’s pricing (to put it politely). The pricing quoted above of $168 one way ($1344 return for 4) or even the OP’s $250 one way) does not seem that out of kilter for pre-Covid non JQ flights. CBR has always been expensive, and JQ is conspicuously absent from the port (as it is from intra WA leisure routes) that tilt things higher than out of SYD/MEL/BNE.

 

[jakeseven7]

Just looking at flights and boy I've never seen Domestic flights so expensive before. I thought there would be some good deals but nope. $2000 return to take a trip to the Gold Coast from Canberra (2A 2C) I just can't afford that.
Such a shame I can see my Gold status isn't going to be around for much longer

I guess it pays to remember that VA1 made no money in the ‘good old days’, collapsed, went into administration and were only rescued by private equity with trillions of dollars behind them.

One key way for Bain/VA2 to start making money is to charge more...

 

[Happy Dude]

My prediction is that airlines will continue to fly less, aided by a dip in consumer desire, thus fares will remain high. It'll be a couple more years before the ship may have righted.

 

[MEL_Traveller]

My prediction is that airlines will continue to fly less, aided by a dip in consumer desire, thus fares will remain high. It'll be a couple more years before the ship may have righted.

Outside of Australia fares seem reasonably back to normal. Ex Australia, for bookings in advance we're pretty much at pre-covid levels for some foreign carriers. Some are pretty high like QR. But others like JL are still around the $5K return to Europe in business, and $1300 in economy. A QF/CX combo to Europe for October is coming in at $4500 return, which is pretty good.

 

[jakeseven7]

My prediction is that airlines will continue to fly less, aided by a dip in consumer desire, thus fares will remain high. It'll be a couple more years before the ship may have righted.

Probably agree, and what is worse there are so many 'fake' airfares for sale - at pretty reasonable prices, that will clearly never fly, especially internationally that is really baiting the more naive travellers into buying....

 

[Happy Dude]

Probably agree, and what is worse there are so many 'fake' airfares for sale - at pretty reasonable prices, that will clearly never fly, especially internationally that is really baiting the more naive travellers into buying....

Yes I was referring to the domestic market and the likelihood that airlines will maintain streamlined services to their benefit, ie fewer services which puts a premium on the seat which only the needy will buy.

It does depend on the intl market too though. The longer the AUS border is closed then the longer the dom prices stay high, and not just airfares but also accommodation and whatever else disposal income is spent.

 

[Bagpuss]

My prediction is that airlines will continue to fly less, aided by a dip in consumer desire, thus fares will remain high. It'll be a couple more years before the ship may have righted.

I agree there as i tend to think it gets forgotten that with international borders closed international travellers would also take domestic flights which in turn affects domestic flight numbers.
Also, with borders opening at shutting domestic leisure is primarily to stay within the state and that many business are still "essential only" domestic travel domestic is a tough gig. (Qantas' aim of 80% pre-covid within a few months is very ambious.)

 

[Mattg]

I guess it pays to remember that VA1 made no money in the ‘good old days’, collapsed, went into administration and were only rescued by private equity with trillions of dollars behind them.

One key way for Bain/VA2 to start making money is to charge more...

VA1 did try increasing airfares at times, but this generally resulted in disproportionately lower load factors and less revenue overall, indicating that airfares were (at the time) very price elastic.

Perhaps at the moment, since only those who really want or need to travel are flying, they can get away with higher fares more than before.

 

[eastwest101]

I dragged out an earlier "semi-scientific" survey of a basket of economy domestic fares that I did in Nov 2020, and then redid it with dates looking forward a similar amount of time, with same flight pairs (chosen because they had at least two competitors) and typical economy fares and the results were on first sight fairly surprising. Think of this as a typical travel budget spend for an organisation that still has some non-discretionary staff flying that it still has to do to maintain business to a minimum standard. Given that state border closures have continued to suppress a lot of demand but looking at seasonal factors and ignoring Covid-19 for a second - we always saw expensive fares in Xmas and New years holidays, but once school holidays were over, prices adjusted downwards as it has happened nearly every year.



One of the interesting (but not surprising in hindsight) things has been the catastrophic drop in basic "no frills" inflexible Jetstar fares without baggage, obviously the lowest yield and most discretionary of passengers have gone on strike due to changeable state border closures and it shows in the fares. Virgin's drop in fares are about in line with fully bundled Jetstar and Qantas fares, maybe a bit worse, but not surprising given Virgin being in the news headlines for the wrong reasons for so long....

The other interesting thing has been the price premium that Qantas has been able to extract over Virgin has changed from a +19% price premium to a +22% price premium over Virgin. I would argue that Qantas's slightly better frequency/economy of scale, onboard product and having lounges open has allowed them to increase their yield premium over VA in the last few months, and I would bet that this price premium that they have been able to extract in J class fares would be even larger than the Y fares in this survey, even though all domestic airlines would surely be unprofitable at the moment, its just a matter of how unprofitable. Note the effect of another competitor Rex on the airfares between SYD and MEL, amazing what the threat of actual competition does even though they haven't started flying yet.

Obviously for people flying routes where there is no competition at all - I would bet London to a brick that airfares have gone up substantially.

Apologies I cant really increase the number of city pairs to make it more scientific/realistic as it would make comparisons with earlier "baskets of airfares" impossible to do.

 

[Mattg]

I dragged out an earlier "semi-scientific" survey of a basket of economy domestic fares that I did in Nov 2020, and then redid it with dates looking forward a similar amount of time, with same flight pairs (chosen because they had at least two competitors) and typical economy fares and the results were on first sight fairly surprising. Think of this as a typical travel budget spend for an organisation that still has some non-discretionary staff flying that it still has to do to maintain business to a minimum standard. Given that state border closures have continued to suppress a lot of demand but looking at seasonal factors and ignoring Covid-19 for a second - we always saw expensive fares in Xmas and New years holidays, but once school holidays were over, prices adjusted downwards as it has happened nearly every year.

View attachment 238349

One of the interesting (but not surprising in hindsight) things has been the catastrophic drop in basic "no frills" inflexible Jetstar fares without baggage, obviously the lowest yield and most discretionary of passengers have gone on strike due to changeable state border closures and it shows in the fares. Virgin's drop in fares are about in line with fully bundled Jetstar and Qantas fares, maybe a bit worse, but not surprising given Virgin being in the news headlines for the wrong reasons for so long....

The other interesting thing has been the price premium that Qantas has been able to extract over Virgin has changed from a +19% price premium to a +22% price premium over Virgin. I would argue that Qantas's slightly better frequency/economy of scale, onboard product and having lounges open has allowed them to increase their yield premium over VA in the last few months, and I would bet that this price premium that they have been able to extract in J class fares would be even larger than the Y fares in this survey, even though all domestic airlines would surely be unprofitable at the moment, its just a matter of how unprofitable. Note the effect of another competitor Rex on the airfares between SYD and MEL, amazing what the threat of actual competition does even though they haven't started flying yet.

Obviously for people flying routes where there is no competition at all - I would bet London to a brick that airfares have gone up substantially.

Apologies I cant really increase the number of city pairs to make it more scientific/realistic as it would make comparisons with earlier "baskets of airfares" impossible to do.

Very interesting analysis, although I can't see most of the screenshot you posted?