Why Are Flights To Australia So Expensive Right Now (2023 Update)

Wondering why flights to Australia are so expensive this year? 

Me too! I have to travel home to Australia at least once a year, and this time, the flights were around 50% more expensive.

Sure, things have gotten more expensive with high inflation, but surely there must be something else at play here, right?

Let’s take a look at all the reasons why flights to Australia are so expensive!

Lack Of Competition & Population

Qantas has had a strong hold on the Australian aviation industry for decades, and there is far less competition in Australia as a result.

Virgin flights from Sydney internationally

During the pandemic, Virgin Airlines went into voluntary administration and later emerged from that. They then had a hefty operational loss in 2022, although seem to be on track these days. Although this mostly affected the domestic market in Australia, Virgin also has international flights to many continents. And they were often quite competitive. They certainly were one of the few operators who kept Qantas on their toes. But now they 

But there is more to it than just that.

Australia is a distant country with a low population density as well. In fact, Australia is ten times less densely populated than the USA, which of course leads to a scale problem. Companies are less likely to fly to Australia and make the investments needed in aircraft and staff.

The profits just aren’t there for them in such a sparsely populated country where most of the people live in just two cities – Melbourne and Sydney.

This leads us to another problem. The sheer costs involved in operating in Australia.

Cost Of Labor

I first noticed this when I went home in 2022. Australia has gotten insanely expensive. What used to cost significantly less than in Switzerland, a very expensive country itself, was now comparable.

So, where does Australia stand in terms of labor costs on the world stage?

You will find more infographics at Statista

Well, the minimum wage in Australia is the highest in the world, which certainly leads to very high labor costs.

Australia also ranks 7th in the world for salaries, which likely does not take into account most of the jobs that affect a flight to Australia (cleaning, baggage, airport staff etc). However, it just goes to show you how expensive the country is becoming.

Not only is Australia expensive in general, we all know now that the service industry is suffering from the “great resignation” still. I saw so many “wanted” signs on business doors when I traveled around Australia. Something I have never seen in my many years coming back home. This certainly adds to wage inflation and the cost of labor in Australia as a whole!

Seasonality 

One factor I always have my eye on when booking flights to Australia is the season. People often come home to Australia, like me, for Christmas and New Year, to visit family and friends. A lot of Aussies live overseas.

So, I find there is a peak after around mid-December to early January that is best avoided. But there are other times to avoid.

The Northern Hemisphere summer time is also a big peak of people traveling around the world as is the Australian summer holidays – which run from around Christmas until early February.

Distance

NYC to Sydney Flight Time

Australia is an island in the middle of the Southern Hemisphere and the closest places tend to be in Asia. However, if you are coming from Europe or the USA, then you are looking at close to a day’s flight time.

The more time you spend in the air, with at least one connection on the way, the higher the price just has to be. It costs more in fuel, personal, food and beverages, luggage handling and various other services.

Let’s compare a flight from New York to San Fransisco which is 2586 Miles, to some flights to Autralia:

• London to Sydney: 10573 miles
• New York to Sydney: 9935 miles
• Buenos Aires to Sydney: 7732 miles

And these distances do not take into account stops in between.

When I fly from Zurich to Sydney it takes me around 21 hours to get there and currently costs around $2200-2500.

Of course, there are non-stop flights from places like London to Perth, which covers 14498 miles and is one of the longest flights in the world. Qantas has been researching and testing this route for a while now, and only started offering it recently.

This is part of an even bigger plan called Project Sunrise which includes a number of non-stop flights from New York to Sydney as well.

Closed Airspace

Closed airspace over Russia & Ukraine – Image courtesy of SafeAirSpace.net

Closed airspace due to the Ukraine war is not as big a deal for some flights to Australia, but if you are coming from London, then it will certainly make a difference.

The further south in Europe you are, or if you are coming from Asia or the USA, it probably makes little to no difference in the price of a flight to Australia at all.

Fuel Costs

Aviation fuel prices over time – Data source Index Mundi

Fuel costs are an interesting one. As you can see in the chart above, the price of fuel has been declining since the peak after the beginning of the war. However, airlines don’t seem to be in a hurry to pass those savings on to us.

Sure, I understand that fuel makes up around 25% costs for an airline, but once prices drop, so should the flight prices to Australia. Qantas certainly did have to deal with high fuel prices in 2022, and it greatly affected their bottom line.

I am just wondering when things will return to normal!