Airfares skyrocket as people look to get away this holiday season
Airfares skyrocket as both fuel prices and demand reach record levels
It’s that time of year, when everyone wants to get away and enjoy the festive season.
But if you’re looking to get on a plane, be prepared to pay a whole lot more.
Airfares have skyrocketed and, unfortunately, there doesn’t seem to be an end in sight.
The Australian Competition and Consumer Watchdog’s recent review found ticket prices are around 27 per cent higher than they were just 12 months ago.
As an example, fares from Adelaide to Gold Coast are up 156 per cent from $374 to $958, while Melbourne to Perth is 146 per cent higher, sitting at $1078.
Now, Qantas boss Alan Joyce has commented on the price hike.
Speaking to The Sydney Morning Herald, Joyce said the sky-high fares are due to a rang of factors including increasing fuel prices.
Fuel prices skyrocket
The airline’s fuel bill in the year-to-date has hit $5 billion mark – the biggest fuel bill the company’s ever had.
On top of this is the unprecedented consumer demand.
Understandably, following two years of Covid lockdowns and restrictions, people are desperate to get away on that long-awaited holiday.
“It’s at unbelievable levels internationally and domestically because people were locked up for so long,” Joyce said.
While this can be expected, no one predicted just how rapidly demand would rebound to exceed 2019 levels.
“Supply is difficult because, like every airline, it’s been hard getting those aircraft back in the air and the combination means that air fares are higher,” Joyce said.
So is there an end in sight?
Well, supply chain issues should begin to ease in 2023.
“Airbus and Boeing are telling us the supply chain issues should be fixed by the end of next year, which will get more planes in the air and airfares will come down as a consequence of that.”
But, more broadly, the Qantas boss believes the global situation remains too volatile to predict. This is particularly true given the ongoing war in Ukraine.
So, for now, we’ll just have to get used to paying more for a getaway.
When will airfares begin to fall?
As the global aviation market rebounds, airlines are changing their service offerings
Over 46 million workers in the global aviation sector lost their jobs as global aviation came to a grinding halt at the onset of the pandemic.
However, Geoffrey Thomas from AirlineRatings.com said passengers have returned to airport terminals and boarded flights in droves.
“When travelled returned, many of us wondered what sort of low airfares will we have to be charged to entice people back onto airplanes.”
In February 2023, total traffic (measured in revenue passenger kilometres) rose 55.5 per cent when compared to February 2022.
Globally, traffic is at 84.9 per cent of February 2019 levels.
“It was a stampede, the likes of which we have never seen before,” Mr Thomas said.
The worst of inflation could be behind us
The unprecedented nature of the pandemic continue to shape international fiscal policy
As reserve banks and federal reserves continue to battle the impacts of Covid-19, inflation has become a dominate issue.
In some parts of the world, rising household costs have slowed consumer spending by more than expected.
It means the end of aggressive rate hikes could come to an end in a matter of months.
In Australia, recent data from the Australian Bureau of Statistics confirmed inflation has passed its peak and is beginning to moderate.
The numbers show annual inflation peaked in December 2022 but will still remain higher for longer than anticipated.
Matt Grudnoff is a Senior Economist at The Australia Institute, who said these are uncharted waters.
“I don’t think they should be fully blamed.
“The pandemic was an entirely different kind of recession, one that we have never seen before.
“The world went into recession because the world shut down for very good health reasons.
“But the economy rebounded extremely quickly, simply because there was no underlying problem with the economy,” he said.
“I think there is a great risk”: will AI steal our jobs?
Artificial Intelligence has become an increasingly powerful and pervasive force in our modern world.
Artificial intelligence is not a new concept. However, the growing advancements have the potential to revolutionise industries, improve efficiency, and enhance the quality of life.
Along with its promising advancements, artificial intelligence also brings certain risks and challenges that must be acknowledged and addressed.
It has become the focus of lawmakers, who are working towards greater regulation of the sector.
U.S. and European Union officials recently met in Sweden to weigh up the benefits and challenges of artificial intelligence, and other emerging technologies.
“The AI process is creeping up on us,” said Dr Keith Suter, who is a global futurist.
“You’ve got competition between companies.”
It’s almost like some of us can see this raft that’s heading towards the rapids and a disappearance towards the waterfall, and we’re giving a warning but it’s not being heeded because everybody’s in this race to get down to the river,” Dr Suter said.
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