Australians travelling overseas for the summer holidays were stung by a jump in prices of almost a quarter from November to December last year, but a recovery in plane production by major manufacturers offers some hope of long-term price relief from major carriers.
The Australian Bureau of Statistics reported a 24.4 per cent jump in the price of international travel, predominantly airfares, from November to December, which is unusually high even for the holiday season.
For the year overall, domestic and international travel prices rose by a more modest 5.8 per cent that still put pressure on national inflation numbers.
AMP chief economist Shane Oliver said the international travel figures were “still an after effect of the pandemic which led to a reduction in competition in holiday travel, in particular airline and accommodation business.
“And that is still having an impact here. So every time we have school holidays prices for travel, whether it’s an airlines or hotels, go through the roof.”
The jump in fares comes as the aircraft manufacturing industry begins a modest recovery in the number of planes it produces, raising hopes for lower operating costs for carriers over time.
Qantas expects to take delivery of more than a dozen planes by the end of June, as its long-awaited fleet refresh is helped by the recovery in plane production.
International aviation consultant Neil Hansford, reviewing the pace of deliveries to Qantas, said renewal of the airline’s fleet would reduce its costs while extending its flexibility. The numbers showed Qantas was “emerging well” from COVID, as the pace of plane production begins to resume in earnest, he said.
London-based aviation consultancy IBA forecasts that Airbus, Boeing and Embraer will deliver 1800 aircraft to global airlines in 2026, an increase from 1530 the year before.
Qantas is on track to have seven Airbus A321XLRs in service by the end of June. They will complement eleven super-efficient A220s arriving at same time at QantasLink.
“The real effect for Qantas will be that they’re not spending as much money on heavy maintenance”, he said. The airline is “buying new aircraft with new warranties and not throwing money into old airframes”.
The slate of new narrowbody aircraft will enhance Qantas’ flexibility to fly new routes to Asia and around Australia. Qantas recently announced A220s will begin flying between Adelaide and Brisbane in March, replacing Embraer 190s. While the 321XLR, replacing 737s, can also fly to international destinations like Fiji and Bali.
Younger aircraft fleets are more efficient and less expensive to operate. Decades old, ageing fleets tend to suffer more frequent mechanical problems, increased downtime, and higher operating costs. Newer aircraft also produce fewer emissions, up to 25 per cent less, bringing them more in-line with climate commitments which will emerge as an additional cost for the industry, and potentially passengers, in coming years.
The average age of Qantas’ fleet is 16.2 years, according to Planespotters, which tracks aircraft fleets. Jetstar’s, flush with A321LR and A321neos, is 10.7 years, while Virgin’s fleet, primarily Boeing 737s, is 12.2 years.
Airbus is due to deliver Qantas’ first A350-1000ULR to be used on its world-first Sydney-London direct Project Sunrise flights.
“Passengers in Australia have left no doubt they want non-stop Sydney or Melbourne to London flights,” said Hansford. Since only Britain would be able to offer a matching route, “this will put Qantas in a really unique position, especially for premium traffic.”
Hansford said Qantas has been well-served by the country’s geographic isolation which has imbued the company with “a high level of confidence”.
The global aviation industry has struggled to produce enough new planes with Boeing, particularly, hit by production problems following the crash of two 737 Max aircraft.
Qantas will deliver its financial year 2026 half-year result on February 26.
The uptick in aircraft production will also see Virgin take delivery of 12 737 MAX-8s in the calendar year 2026, as well as four more Embraer E190-E2 for its Virgin Australia Regional Airlines that serves WA, joining two already in service.
Singapore-based aviation consultant Brendan Sobie said the manufacturers are experiencing a “gradual recovery” that could take “at least a few years”.
“Airlines are naturally eager for the supply chain and delivery issues to be resolved as they impact their ability to complete planned fleet renewals and expand,” he said. “Consumers, of course, also benefit when airlines expand as it results in more capacity and competition in the market.”
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