Flight Centre Corporate’s annual Airfare Inflation Index has revealed that international economy fares are lower than they were three years ago, despite inflation rising 11% across the Australian economy.
The analysis compares the cost of Flight Centre Corporate’s average booked airfares and selected household goods from January to June 2026 against the same six-month period in 2023, widely regarded as the first full year of normalised travel following border reopenings and the end of pandemic-related disruptions.
FCM Travel and Corporate Traveller Global COO Melissa Elf said despite short-term fluctuations in pricing, airfares have largely tracked below inflation since the travel industry emerged from the disruption of Covid-19.
“By comparing the first half of 2026 with the first half of 2023, we’re able to get a much clearer picture of how airfare pricing has moved in a post-Covid environment,” said Elf.
According to the Reserve Bank of Australia, a basket of goods and services valued at A$1 in financial year 2023-24 would cost approximately $1.11 in financial year 2025-26.
While inflation increased by 11%, the cost of an international economy fare fell 7%. Meanwhile, international business class fares rose by 4%.
Domestic economy fares increased 10% over the same three years, still coming in slightly under the broader rate of inflation.
The analysis compared daily household items such as apples, takeaway coffee, bread, milk and fuel, revealing airfares had increased at a lower rate than almost all of them. Apples rose by 3%, take away coffee by 25%, a loaf of bread by 18%, a two-litre carton of milk by 14% and a litre of unleaded fuel by 5%.
Jet fuel prices, however, surged more than 40% between February and June this year, creating immediate pressure on airline operating costs.
“Of course we go through temporary periods, like the recent middle eastern conflict for example, where we will see a swift hike in prices for a time, but history will show that over longer timeframes this balances out,” Elf said.
“Oftentimes, after a period of disruption, we’ll see carriers reduce prices again to encourage travellers back onboard because at the end of the day, they need passengers on their aircraft. What we’re seeing now compared to three to five years ago is a more mature market balancing demand, competition, airline capacity and operating costs.”
Elf added that, for businesses, travel budgeting is becoming less about managing extreme volatility and more about understanding market dynamics.
“Travellers who plan ahead, avoid peak periods where possible and use data to inform decisions will generally achieve better outcomes,” she said. “The encouraging result is that despite inflation affecting almost every aspect of daily life, airfare growth has remained relatively restrained, particularly for international travellers.”
