Australian travellers are finally enjoying some cheaper airfares, thanks to lower prices for jet fuel and more seat availability – with the price relief expected to continue.

Domestic economy airfares were 12 per cent cheaper in the first two months of 2025 than the same time last year, data compiled by corporate travel adviser FCM Consulting showed.

That represents $29 off the average ticket price.

The price drop comes despite the Australian Competition and Consumer Commission claiming limited domestic competition was helping the country’s dominant airline groups – Qantas and Virgin – boost their profit margins.

While Qantas Group earnings before tax soared to $1.5 billion in the last six months of 2024, and Virgin Australia also announced record profits, market dynamics since the new year have benefited travellers.

Globally, jet fuel is down almost 17 per cent compared to the 2024 average, driven in part by economic uncertainty from US President Donald Trump’s trade war curtailing demand for oil.

Fuel is airlines’ largest operating cost, so fluctuations flow through to fares.

Ongoing weakness in jet fuel prices will continue to put downward pressure on airfares in coming months, the ACCC predicts.

FCM Consulting director Felicity Burke said the fare drops in Australia and the broader Asia-Pacific region were sharper than in the rest of the world.

“We’ve been saying for a long time now that global capacity increases and other factors like jet barrel cost reductions would go hand-in-hand with airfare price drops in various regions, and this is one of several reasons that we’re now seeing this come to fruition,” she said.

Despite the consumer-friendly trend, fares on the “golden triangle” route between Melbourne, Sydney and Brisbane remained fairly flat. That was due to higher demand leading to few spare seats between Australia’s major capitals.

Airfares shot up post-Covid as airlines struggled to keep up with the sharp rebound in demand. They have since moderated as more seats were brought online.

Global capacity in May was 7 per cent higher than 2019 and 5 per cent higher than the same time last year.

International economy airfares out of Australia dropped 5 per cent in January and February compared to the same period last year, while business class tickets fell 3 per cent.

In further good news for prospective passengers, more routes will be launched in the second half of this year.

Virgin’s partnership with Qatar Airways, which got the nod from the ACCC in February, will mean further competition on the highly-trafficked Australia to Europe corridor. It will offer 28 new weekly return services between Doha and Perth, Brisbane, Sydney and Melbourne.

“Through this partnership with a world-leading global airline, we expect to not only create more choice for travellers but also drive healthy competition, which typically helps to place downward pressure on fares over time,” a Virgin Australia spokesperson said.

Also coming in the latter part of 2025 are more Qantas routes, including Adelaide to Auckland and Perth to Auckland and Johannesburg.

Qantas said earlier this week is would boost capacity on the busy trans-Tasman route by 20 per cent during the peak summer period. It includes more flights from Sydney, Melbourne and Brisbane to Auckland, Wellington, Christchurch and Queenstown.

“This capacity boost represents almost 60,000 more seats compared to last summer, giving our customers additional choice and more convenience as well as supporting tourism and economic growth in both markets, CEO Qantas International Cam Wallace said.

Elsewhere, however, cases of tourists being detained and deported by US border security have spooked travellers.

Graham Turner, the chief executive of FCM owner Flight Centre, said leisure travel bookings to the US dropped by up to 15 per cent in the first three months of the year.

But it has had little effect on airfares to the US, which fell by about 3 per cent, largely in line with the rest of the world.

-with AAP