Airfares hit maximum altitude as capacity constraints hit the market

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Opinion: Want to travel overseas? Be prepared to scrape your fingernails on the bottom of the piggy bank. International airfares have doubled as blistering demand and shrunken capacity has enabled airlines to raise prices to combat higher fuel costs | ...

Even in the face of a raging new wave in the COVID-19 pandemic, rising interest rates, and recession fears, consumers travelling in business class are shelling out more than $18,000 to get to Europe and the US while those in economy are paying fares of around $5000, according to Flight Centre chief executive Graham Turner.

The higher airfares helped to push Flight Centre’s total transactional revenue to $10 billion for the 2022 financial year but its return to pre-COVID levels requires airlines to increase capacity. Although Qantas’ and Flight Centre’s share prices reacted strongly to Flight Centre’s latest earnings upgrade - up 2 per cent and 5 per cent respectively, this sector has been threatening positive news for a while.

It said Qantas would be sensitive to recession but believed it was more resilient than it had been previously given its lower fixed costs and ability to adapt capacity to demand. It placed a 12-month price target of $6.55 - 42 per cent higher than it is currently trading.

 

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Thieves

This puppy is happy to go to their holiday home on the coast.

It’s really not that hard to travel on the cheap. Budget airlines, avoid travel agents, go off peak outside of school holidays. If you must travel during school holidays, hire a babysitter and enjoy your trip 😉

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