Airfares could soar by more than 19 per cent in 2023 with inflation, the rising cost of fuel and fluctuating foreign exchange rates the main drivers behind rising ticket prices, according to American Express Global Business Travel in its annual Air Monitor report.
The worst affected market by double-digit price rises will be Australian domestic flights, where Business Class fares could soar by as much as 19.4 per cent. Trans Tasman flights, where a capacity crunch will also hit prices, will see fare increases of around 18.8 per cent for Business Class seats.
Flights between and Europe will only see ‘modest’ price rises of around 3.7 per cent in both Business Class and Economy, while European short-haul flights could see rises of 6 per cent in Business Class and 5.5 per cent in Economy.
U.S. domestic travelers won’t be as badly hit, with Amex forecasting 3.4 per cent fare rise in Business Class and 2.9 per cent in Economy.
The chief culprit for rising fares is fuel prices, with even modest price increases likely to be passed onto consumers. The report also said inflation is having an impact on airfares, while staffing shortages and capacity constraints are giving airlines the ability to charge a premium for the few seats that are available.
