Australians travelling overseas can expect cheaper airfares in 2024 as new carriers and bigger aircraft bring more seats to key destinations online.
After reaching historic highs following the COVID-19 pandemic, international airfares fell in the second half of last year alongside an increase in competition, data from Flight Centre reveals.
Analysis by Flight Centre's corporate divisions, FCM Travel and Corporate Traveller, found outbound prices for economy tickets across all carriers decreased 12.9 per cent in the second half of 2023, resulting in an average saving of $280 per ticket.
Airfares for business class and first class passengers fell eight per cent over the same period.
Travellers to Hong Kong experienced the greatest drop in prices, with economy airfares down almost 36 per cent, as capacity to South-East Asia rocketed back above pre-pandemic levels.
There was a direct correlation between destinations that welcomed new capacity and the cost of travel decreasing, Flight Centre Corporate managing director Melissa Elf said.
While airfares were down across the board, there is room for capacity to recover and prices to drop further on routes to the Middle East, New Zealand and North America, with available seats at 81 per cent, 86 per cent and 91 per cent of pre-2019 levels respectively.
"There's still restricted capacity on European flights and that's the last frontier we need to conquer for customers to feel relief on routes to the likes of the United Kingdom, France, and Italy," Ms Elf said.
"This is evidenced by softer airfare decreases to these destinations.
"With demand into Europe high, it's critical more flights and competition are added, with the recent announcement like the granting of slots to Turkish Airlines being exactly what the industry needs for prices to drop even further."
The federal government in December granted the Istanbul-based carrier's application to increase its flight allocation into major Australian airports.
The airline on Friday announced it would fly three services a week into Melbourne from March 15, but flagged future expansion.
"In the coming years, we plan to strengthen our presence in this beautiful country by increasing both the frequency of our flights and the number of our destinations," Turkish Airlines chairman Ahmet Bolat said.
Australian Travel Industry Association chief executive Dean Long warned while he expected prices to come down in 2024, passengers were unlikely to see a continuation in "massive decreases in airfares".
"You still have a higher oil price, you still have a higher operating cost for most airlines," he told AAP.
Mr Long expects airfares to decrease modestly across all segments over the next couple of months before stabilising in March.
Routes to Europe are likely to see significant increases in capacity with carriers including Singapore Airlines and Turkish Airlines announcing increases to the size of their planes.
"So I think there's going to be some amazing deals for Australians in the European summer this year," Mr Long said.
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