Flight Centre UK has predicted air fares to destinations in Asia and Australasia will continue to fall until the middle of this year.
The agency chain reported that as of December 2023, eastbound airfares out of the UK were down by 8% overall in comparison with prices charged in December 2022.
Economy fares were down by 14% year-on-year while business class fares declined by 9%.
Justin Penny, head of aviation at Flight Centre UK, attributed the price drops to airlines attempting to inflate consumer demand for flights following a drop-off due to the cost of the living crisis in the UK.
Also to blame for the price drop is the capacity on routes to Australia and New Zealand, where there has been a lack of capacity historically, keeping air fares high in recent years. With capacity now returning, fares are falling in price.
Penny attributed delays to new aircraft being delivered as the “most limiting factor for ticket yield at present” caused by supply chain disruptions as a result of energy prices, inflation and geopolitical conflicts impacting shipping routes.
“With new orders from Boeing and Airbus full until 2032, this is set to be a long-term issue,” said Penny, who forecast that eastbound air fares would continue to fall for several months into 2024, before starting to plateau in the middle of the year.
By way of contrast, airfares westbound have begun to stabilise after a period of decline since July 2023, when fares were down by 9% year on year.
In December 2023 the downward trend appears to have halted, with prices up by 2% on December 2022, the first increase in fares since June last year. Broken down, economy fares in December were up 10% year-on-year, premium economy fares were up 8%, but business class fares remained down 7% on the previous year.
The agency chain’s latest data also showed the trending destinations from February to April 2024 to be Japan, Saudi Arabia, Zimbabwe, Argentina, and the Seychelles.
Japan, which opened its borders to international visitors in October 2022, has moved up 15 places to become the ninth most popular destination among consumers.
Saudi Arabia, which has launched a ten-year investment plan to boost tourism, climbed up 27 places to become the 28th most popular.
Among the notable top sellers which have become popular than a year ago are Indonesia, in fifth place, Zimbabwe, in ninth position, Argentina in 12th place and the Seychelles in 13th.
Indonesia is sixth places higher than it was in April 2023, which the agency said was due to improving weather as the destination comes out of the wet season and prices being at their lowest for March and April thanks to seasonal promotions.
Zimbabwe, Argentina, and Seychelles are the top climbers, having risen 32, 24, and 61 places respectively. Argentina was singled out for its currency having never been better value for the UK market, according to Flight Centre, and similarly the Seychelles was names as being the most competitively priced it has ever been.