8 Reasons Why Flying to Australia Is So Expensive

Flights to Australia have historically been very expensive from pretty much anywhere in the world. Though intercontinental travel has gotten significantly cheaper across the board, it seems that flights to Australia have remained just as expensive as they were before.

Here are 8 reasons why flying to Australia is so expensive:

  1. Australia is very far away.
  2. Australia is a very sparsely populated country.
  3. Australia is a wealthy country.
  4. Few airlines have been able to break Qantas’s monopoly.
  5. Low-cost airlines operate limited international routes.
  6. There are few stopover options from North America.
  7. There is an Australian departure tax.
  8. Australia has tough COVID-19 border measures.

If you think flights to Australia are very expensive, you’re right. Many geographical, economic, and bureaucratic factors make plane tickets to Australia more expensive than tickets to other countries. Let’s explore all of these issues to better understand why flying to Australia is so expensive.

1. Australia Is Very Far Away

Australia is far away from the western hemisphere, and anyone who has taken a flight to Australia will confirm this.

London’s Heathrow airport and Sydney’s Kingsford Smith airport are separated by a whopping 10,573 miles (17,015.59 km). For comparison, Heathrow and New York’s JFK airports are only 3,451 miles (5,553.85 km) apart.

Australia is so far away that Qantas recently broke the record for the longest passenger flight by flying one of its Boeing 787-9 aircraft non-stop from New York all the way to Sydney. The flight time clocked in at a massive 19 hours and 16 minutes, making it much longer than most people would like to be in an aircraft.

Though this flight isn’t yet commercially available, it was a test of Qantas’s new Project Sunrise, which aims to increase the number of ultra long haul flights from Australia.

Qantas’s CEO, Alan Joyce, says that he hopes Project Sunrise will give them the “ability to fly from Sydney and Melbourne to the last horizon, the last tyranny of distance, direct into London, direct into the east coast of the United States.

These routes are too long to be commercially viable today.

Besides the routes that Project Sunrise seeks to enable, Australia currently has three of the world’s top ten longest commercial flights. The routes are Perth to London, Sydney to Dallas, and Sydney to Houston, all clocking in at over 17 hours of flight time.

Although distance doesn’t always equate to prices in the aviation world, it’s important to compare apples to apples. Flying from London to Sydney is almost three times the distance as flying from London to New York, so it’s not fair to compare transatlantic fares with ultra long haul fares.

2. Australia Is a Very Sparsely Populated Country

Australia is the sixth-largest country in the world in terms of land but only the 55th largest by population. These figures make Australia one of the most sparsely populated countries globally, with only nine people per square mile (three per square kilometer).

Australia’s lack of density makes traveling to and within Australia a little tricky.

Densely populated areas will benefit from frequent passenger flights on larger, more efficient jets. More flight availability gives passengers more options and better pricing. Because Australia doesn’t have many large population centers, it’s hard for airlines to find the demand to fill numerous high-capacity jets on different routes.

This is why most flights between Australia and the United States operate from LAX.

British Airways alone operates 26 routes between the UK and North America. Compare this with Qantas’s only six destinations in North America.

Virgin Australia doesn’t even fly to North America anymore.

The lack of robust demand between Australia and countries like the United States makes it hard for airlines to supply enough seats to enjoy economies of scale. This also means that there’s not as much competition to drive down prices.

3. Australia Is a Wealthy Country

As of 2018, Australia ranks as the fifth-wealthiest country in the world, both in per-capita terms and in total wealth. With a small population of just over 26 million, this makes Australia one of the wealthiest regions in the world by far.

Not only is the average wealth extremely high, but the minimum wage in Australia is also the highest in the world. Australians enjoy the highest minimum wage of any other country globally, with the nationwide minimum set at $14.54 as of 2020.

The amount of money Australians have means that airlines aren’t exactly vying for super price-sensitive passengers. One of the main reasons flights to and from Australia are expensive is that people can afford them.

This is a bitter truth about life in Australia.

Because their wages are so high, they pay far more than other countries for daily necessities. If you’re planning a trip to Australia, you should prepare to spend more not just on your flights there but also on pretty much everything that you buy while in Australia.

4. Few Airlines Have Been Able To Break Qantas’s Monopoly

Competition is a great way to drive down prices. After airline deregulation, competition has increased across the board, raising the number of available flights and dropping the average prices of tickets.

Although Australia’s airline deregulation began in the late 1970s, there have been a few reasons why competition hasn’t managed to keep airfare costs down.

Ansett’s Bankruptcy

Ansett Australia was Qantas’s biggest competitor in the late-20th century. However, the airline filed for bankruptcy in 2001 and eventually ceased operations. At the time of closure, the airline operated 134 aircraft, making it a significant player in the Australian aviation business.

After Ansett’s collapse, Qantas became the de-facto flag carrier of Australia. This meant that Qantas enjoyed a monopoly on a number of its routes and was able to charge a premium for its tickets.

Air Australia’s Demise

Air Australia was another failed contender in the Australian aviation market. Founded in 1991 as a freight airline, Air Australia introduced passenger service in 2009 with ambitious plans to operate all over Asia and the United States.

The airline, however, was involved in several corruption scandals due to defense contracts they had with the Australian government before the introduction of passenger service. These scandals, along with strategic mismanagement, led to the collapse of Air Australia in 2012.

The airline ceased operations so abruptly that it stranded 4,000 passengers in Thailand. This put an end to another airline’s plan to give Qantas some competition.

Virgin Australia Is On Shaky Ground

As mentioned earlier, Virgin Australia ceased operations to Los Angeles in 2020, eliminating its presence in North America. Following its intention to halt trading in 2020, many started to worry about the airline’s financial state and future as one of Qantas’s main rivals.

Though Virgin Australia continues to operate today, its international footprint has shrunk significantly. This reduced competition on international flights is another reason why flights to Australia are so expensive.

5. Low-Cost Airlines Operate Limited International Routes

Qantas and Virgin Australia are both considered full-service carriers.

They follow a traditional airline business model, which generally aims to offer an all-inclusive flying experience, different cabins of service, and numerous perks for frequent fliers. Full-service carriers don’t generally offer low fares.

However, Australia does have its own low-cost carrier offering “no-frills” flights for lower fares. Though passengers of low-cost carriers generally have to pay a fee for checked bags, in-flight drinks, and seat selection, they can also generally find cheaper flights.

JetStar is Australia’s largest low-cost airline, offering domestic and international flights from numerous cities in Australia. The problem is that JetStar’s intercontinental fleet is quite small, as they only operate 11 Boeing 787-8 aircraft.

Their small long-haul fleet severely limits how many intercontinental flights they can operate. As of 2021, JetStar’s international operations are wholly restricted to the Asia-Pacific region, including Honolulu.

Because JetStar’s long haul operations are still quite limited, their effect on fares to Europe and North America hasn’t yet been impactful. As of 2021, no low-cost carriers operate non-stop flights between Australia and North America or Australia and Europe.

6. There Are Few Stopover Options From North America

A phenomenon that seems to defy all economic laws, connecting flights tend to be much cheaper than non-stop flights. Even though taking two separate flights tends to be a lot more costly than taking a single non-stop, airlines often price connecting flights significantly lower than non-stops.

This is mostly because business passengers tend to value convenience above price, which means that price-sensitive passengers won’t mind a layover, while business passengers won’t mind paying more for a more convenient non-stop.

The problem with Australia is that a lot of its long-haul flights don’t overfly anything. A flight from Sydney to LAX spends pretty much the entirety of the flight overflying the Pacific Ocean. The same is true for Sydney to Johannesburg and Sydney to Buenos Aires.

These geographical limitations make it impossible for airlines to offer cheap connecting flights for many international routes to Australia.

This is something that Middle Eastern carriers managed to capitalize on. With hubs like Dubai, Doha, and Abu Dhabi perfectly located to connect passengers from Australia to Europe, these carriers managed to offer convenient connecting flights at much lower prices than European and Australian carriers.

Stopovers Are More Efficient for Ultra Long Haul Flights

Another reason why connecting flights can be cheaper involves the economics of ultra-long-haul flying. When you’re going to fly a plane for upwards of 17 hours, you’re going to need a lot of fuel.

A Boeing 747-400 will burn approximately 36,000 gallons (150,000 L) of fuel on a 10-hour flight.

Things get complicated when you factor in the weight of the fuel in your flight calculations. A lot of the fuel that you load up will be burnt carrying the extra weight of all the extra fuel. Thus, flying a fuel-heavy plane for a long time becomes incredibly inefficient.

This is why stopping in the middle becomes an efficient thing to do for ultra-long-haul flights. Instead of carrying a lot of fuel all the way, you just have to carry enough fuel to make it to the stopover airport.

Because of this, international flights to Australia that don’t have viable stopover airports can be very expensive.

7. There Is an Australian Departure Tax

Another reason why flights to Australia are so expensive is purely bureaucratic. The Australian Border Force applies an AU $60 (approximately $44) surcharge on every passenger that leaves Australia on an international flight.

The ​​​Passenger Movement Charge (PMC) is applied to all outbound international travelers, regardless of their citizenship or visa status. That means that both tourists and Australians alike must pay this tax every time they leave the country.

If they must pay this tax every time, it might mean that more people will stay home, rather than travel out of the country.

8. Australia Has Tough COVID-19 Border Measures

Another reason why demand has been heavily impacted in recent years is Australia’s tough stance on Covid-19 border measures. Since March 2020, both Australia and New Zealand have imposed harsh border restrictions, making it impossible for non-citizens to enter either country without first obtaining a special exemption.

This greatly reduced demand between Australia and the outside world, making it very costly for airlines to operate empty widebody jets across the ocean.

Luckily, Australia is now open for travel, which will hopefully bring a larger supply of international seats and lower fares. And, we hope that the easing of border restrictions will increase both the demand and supply of international seats to and from Australia, which should eventually result in lower airfares.

Sources

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