Domestic air fares to ease but international costs to stay high until Chinese carriers return

Domestic air fares

Domestic air fares will decrease early next year while international costs will remain high until Chinese carriers return later in 2023, according to Flight Centre’s Corporate Traveller.

Tom Walley, global managing director at Corporate Traveller, said domestic travel costs in the US have already started to plateau and fall, with Australia to follow suit next year given the increased competition on the east coast thanks to Rex Airlines.

Walley said he expects Chinese carriers to return in the first half of 2023, bringing competition back to the international market and flight capacity back to circa 90 per cent of pre-Covid levels by mid-2023. As a result, the cost of Australia-Europe and Asia routes will decrease, while Australia-US routes will be slower to fall.

“From next year, I’m forecasting the business travel industry will continue capitalising on its post-Covid growth and success as businesses and their employees gain more confidence to return to the office and the skies, with the travel journey becoming more digitised and new industry partnerships emerging to improve and expand the choices available to travellers,” he said.

Walley also said Australian businesses will also no longer regard Covid as a top travel concern with fears of infection risks and Government restrictions continuing to drop. As a result, more businesses will book their travel well in advance.

“We are beginning to see businesses booking travel 40 days in advance at Corporate Traveller, from 30 days during the height of the pandemic, as a result of improved confidence and a way to reduce travel costs,” he said.