The holiday season is upon us, and with it comes the annual pilgrimage of people travelling home, to friends, and on holiday. But this year, the cost of flying has reached sky high levels. Qantas chief executive officer Alan Joyce has explained why airfares have reached such heights over the festive season.
Mr Joyce said the price hike is due to a number of factors. Firstly, the cost of fuel has been steadily increasing, which has put pressure on airlines and forced them to increase the cost of airfares. Secondly, he noted that airlines are facing unprecedented levels of passenger demand. During the holidays, demand for flights is always high, but Mr Joyce said that this year has seen an “unprecedented surge in demand”, due to the fact that more people are travelling than ever before.
“The ACCC has published a quarterly report indicating that airfares for October 2022 are at 27% higher than the pre-COVID October 2019 figures,” He told The Sydney Morning Herald in an interview.
“The cost of fuel has drastically driven up prices this year, resulting in an unprecedented expenditure of $5 billion, the highest fuel bill we have ever encountered.”
“Demand is much greater than supply, both domestically and internationally, reaching an unprecedented level due to the extended period of confinement and the unexpected speed with which demand has returned to above its 2019 levels.”
According to Mr Joyce, while the supply chain problems are likely to be alleviated by 2023, the global circumstances remain too unstable to be able to make any predictions, particularly in regard to the war in Ukraine.
The Airline Competition in Australia report recently released by the ACCC has shown that the biggest rise in fares has been in discounted economy tickets, due to the fortuitous growth in demand for airlines.