Airfares ‘will definitely be higher’, aviation expert warns

Airfares are about to got more expensive, with airlines cutting their services to Australia to cope with the rising cost of fuel, an expert has warned.

The number of seats sold on planes flying out of the country will drop for the first time in 14 years this summer, according to The Age, by about one per cent between October and March.

It will be the first time international summer capacity has decreased since 2005.

And it’s happening because the rising price of oil is making long-haul flights to Australia less viable, and major airlines are being forced to trim their number of Australian services.

Emirates has reduced the frequency of its Dubai-Perth service from 11 down to seven times a week, and will scrap its daily Dubai-Bangkok-Sydney service next week.

The fallout of this will be higher fares, an Airline Intelligence and Research consultant says.Source:istock

Cathay Pacific is axing its Cairns-Hong Kong service as other Asia-Australia routes fall about one per cent over summer. Virgin will cut back the frequency of its Sydney-Auckland flights from 18 to 15 return flights a week from July, and its Sydney-Christchurch service will return to a seasonal summer service.

Seats on flights between Australia and the US are going down over winter, but will pick up again for summer. With supply restricted, “there will definitely be higher fares,” Airline Intelligence and Research consultant Tony Webber told The Age.

“(The airlines are) being more rational now, which is really good news for Qantas and Virgin,” he said.

Qantas chief executive officer Alan Joyce said this month it was able to grow its market share as other carriers pulled back on their capacity.

The rising price of jet fuel was a hot topic at last year’s International Air Transport Association annual meeting in Sydney, where airline bosses said it would inevitably lead to higher airfares.

American Airlines chief executive officer Doug Parker said at the meeting that as fuel made up around 25 per cent of an airline’s costs, carriers would be forced to drive up airfares and reducing the capacity of their aircraft.

Mr Parker had previously warned passengers the rising price of fuel would be passed on to them.

“Oil is our second-largest expense. So when it increases, the cost of air travel increases,” he last year.

“I would expect you would see higher fares to consumers over time.”

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