A post-Omicron travel boom has met with financial headwinds from rising fuel costs, airline staff shortages and the Russia-Ukraine conflict, with experts urging travelers to book plane tickets on as soon as possible.
Webjet CEO David Galt said that while many travelers have noted a surge in international airfare prices compared to 2019, this increase is not necessarily affected by the global surge in oil prices for the moment.
“With airlines hedging their fuel, these higher prices are driven by capacity constraints on flight routes due to staffing shortages in the industry,” Galt said.
Airlines are currently recruiting and training new employees with the aim of increasing the capacity of all services in the coming months, but this can only help in the short term.
“It is likely that this will be offset by the effects of high crude oil prices, which we believe will lead to rate increases,” the Webjet boss said.
Qantas has just announced a further round of domestic capacity cuts and fare increases from July and August, after revealing earlier this month that 90% of the group’s fuel requirements are covered for the second half of the 2022 financial year.
“These additional discounts will be rolled out gradually into industry booking and reservation systems over the coming days,” a statement from Qantas said.
Virgin Australia has also warned of modest rate increases ahead.
A Virgin Australia spokesperson said: “While inflationary pressures, including airport fees, fuel costs and technology costs, mean prices will rise slightly, our fares will remain low and continue to rise. represent great value to our customers.”
Canstar financial expert Steve Mickenbecker said the Russian oil embargo would not be short-lived and would have an indefinite impact on airfares.
“Travelers will have to factor that into the vacation budget for a while,” Mickenbecker said.
Despite the rising cost of flying, Australians appear willing to shell out the extra cash when traveling internationally, with data from the Australian Bureau of Statistics showing a 76% increase in the number of Australians traveling abroad in April. The number of departures from Australia almost doubled between March and April.
“With the pent-up demand for overseas travel and the forced vacation savings people have made over the past two years, travelers will be reasonably prepared to cover the cost of higher airfares,” Mickenbecker said.
However, airlines take into account the general rise in the cost of living when raising fare prices, according to Mickenbecker.
“The price increases come at a time when household budgets are under pressure and mortgage rates are rising around the world, which limits the scale of the increase in fares that travelers will be willing to pay and that the market can absorb,” he said. .
As households feel the pinch, Qantas launched its first ‘fly now, pay later’ this week; with the company Zip, allowing customers to spread the cost of airline tickets over multiple payment cycles.
Mickenbecker noted: “The risk is, however, that this additional payments facility may induce people to spend more on vacation than they can afford.”
Alan Kirkland, CEO of consumer advocacy group Choice, said consumers should be wary of any “buy now, pay later” scheme.
“These credit providers are known to target people with existing loans, encouraging them to buy now, pay later loans to pay for essential goods and services, such as food, electricity bills and rent” , said Kirkland.
“For too long companies have been allowed to sell unregulated loans to Australians. It is essential to close this loophole in our laws. Extending it to flights and travel is a step in the wrong direction.”
HOW TO SCORE LOW AIRFARE FARES
Travelers have found creative ways to keep air travel costs low despite airline price hikes.
A tutorial showing how to find the cheapest fares for a particular month using Google Flights recently went viral on TikTok, attracting over 50,000 views.
In the travel hack, user @lifeofjazz__ shows how updating your Google Flights search from “Specific dates” to “Flexible” and leaving the final destination field blank can help you narrow down all flights and cheapest destinations for a given month.
Applying the viral tip to a June Google Flight search, we are able to find one-way weekend flights from Sydney to Melbourne starting at $44, Melbourne to Adelaide starting at $52 and Sydney in Brisbane from $71.
Mickenbecker said that while gleaning the cheapest fares from online hacks can save you money, it could have other repercussions.
“You may find that following travel tips to get cheap deals to save on airfare could blow up your travel times and potentially cost you a vacation day at the start and end of your trip,” warned Mickenbecker.
A lower-risk approach, according to the financial expert, is to book well in advance of your preferred travel date.
“Planning ahead gives you the ability to compare the best deal from a wider range of choices.”
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