Key Points
- International flight prices departing Australia have surged over 50 per cent on 2019 figures.
- The government is under pressure to explain why it has blocked Qatar Airways from adding extra flights to Australia.
- Qantas admitted lobbying the government against allowing the additional services.
Julie Muir spent months trying to calculate how she could afford to fly to Ireland for her stepsister's wedding around Easter this year.
She's a marriage celebrant in Australia and was asked to play a major role at the ceremony even though her licence doesn't apply in Europe.
She tried dozens of combinations of routes through Asia and the Middle East, landing at a whole range of European airports, but she couldn't find any return trips from Sydney that would have cost less than $3,500 per person.
With her husband and two-year-old son also desperate to make the trip to see family, the costs would have been over $10,500 and they had to make the devastating decision to miss the wedding.
Julie had to make the "devastating" choice to miss her sister's wedding because international airfares are so high. Source: Supplied / The Branding Photographers
"It was just a small wedding with about 20 people, all family, so I was the only one that didn't make it, and it was a missed opportunity for my son to meet my side of the family."
Muir said it was "crazy" that airfares were more than double than the $1,400 return she paid when she did the same trip in April 2022.
"We just couldn't justify it, it was too much money so not only would we have had to save ridiculously hard but when we came back, we'd probably still be paying it off," she said.
"We wouldn't have been able to make any family plans for ourselves or holiday locally or anything for the rest of the year."
Muir has lived in Australia for 12 years and before would typically fly back to Ireland annually, but can probably only see family every two or three years if airfares remain so high.
She said she's frustrated and "perplexed" that airfares from Australia after the pandemic and believes there's a perception airlines are being greedy.
Would increased competition lower airfares?
International airfares departing Australian cities have surged by more than 50 per cent above pre-pandemic levels, according to data from flight comparison website KAYAK released in June.
Virgin Australia CEO Jayne Hrdlicka told ABC radio on Tuesday that allowing Qatar Airways — an airline that it formed a strategic partnership with in 2022 — to increase the number of flights it operates into Australia could reduce airfares by at least a third and as much as 40 per cent.
"You got the entire industry (supporting this) and Qantas is the only party objecting," Hrdlicka said.
Virgin Australia wants the government to reconsider its decision to block a Qatar Airways plan to add 21 extra flights each week to the 28 it already operates into Australia — a proposal Qantas opposes and has lobbied the government against allowing the additional services.
The Albanese government has blocked Qatar Airways from flying more flights into Australia. Source: AAP, SIPA USA / Mondadori Portfolio
Qantas general counsel Andrew Finch told a parliamentary inquiry into competition there was no way of knowing how the entry of Qatar would affect airfares.
"The reality is that no one has any idea what the counterfactual would look like if Qatar had been given permission to add the capacity that it had sought through the government," Finch told the committee on Tuesday.
When rejecting the plan last month, Transport Minister Catherine King said it was "not in the national interest to approve it". She said on Monday that "no one factor" swayed her consideration "one way or the other".
Also on Monday, Qantas CEO Alan Joyce told a that the federal government's decision was in the "national interest".
Qantas — which — and its subsidiaries Jetstar and Qantaslink have been "bully boys" by dominating "most of the terminal space and also to a lot of the takeoff and landing slots at the major airports", said David Beirman, an adjunct fellow in management and tourism at the University of Technology Sydney.
"That means to a certain extent that they can limit the number of other airlines that can take off and land at airports," he said.
"They're enjoying 30 per cent of international flights in and out of Australia, which is probably one of the highest rates they've ever had, so obviously, they want to try and protect that dominance of the market."
This is compared to around a 15 per cent share they had before the pandemic.
"The more competition you get on a particular route, the better it is for the customer. And obviously, the lower the fares are going to be."
Opposition finance spokeswoman Jane Hume said it was "quite confronting" that Qantas heavily lobbied the Albanese government to deny Qatar the extra flights, which would have provided an extra one million seats a year.
"Increasing the competition would bring down the cost of airfares for Australians and the Albanese government has denied that," she told Seven's Sunrise program on Tuesday.
But Gui Lohmann, a researcher at the Griffith Institute for Tourism, said what the government has actually done is not to allow Qatar to go above and beyond the limit that it has stipulated for the airlines.
He said competition is increasing.
"Cathay Pacific recently doubled flights to Brisbane Airport, we see Singapore Airlines increasing capacity," he said.
"What the government basically said to Qatar, and to all the other former carriers is to not try to push for an increase in the current cap, because we're not going to change the cap.
"The reason why they don't want to change the cap is because they want to have healthy competition in the international market, they don't want more airlines to dominate certain routes and certain terminals.
When will airfares become cheaper?
Airfares could continue to remain high "throughout pretty much the rest of 2023", Beirman said, "because so many airlines are trying to make up for the losses that they incurred because of the COVID-19 pandemic."
But the International Air Travel Association has predicted airfares will start to come down in 2024.
"I think it's very unlikely airfares will go back to the 2019 levels," Beirman said. "Because fuel costs remain high and so many airlines are still in debt from when they were unable to fly during the pandemic."
- With additional reporting by AAP
