These are confusing times, especially when it comes to airfares in Australia. On one hand, the US-Israeli conflict with Iran has reshaped flight routes and squeezed jet fuel supplies, causing fares to rise sharply. On the other hand, the cost-of-living crisis has forced travellers to deprioritise travel, leading to discounts.
Justin Brownjohn, senior manager at RMIT Aviation Academy, explains the complexity. "It is an interesting time to be operating an airline in Australia," he says. "In one part of the market, we have a large disruption to fuel oil supply chains causing the cost of jet fuel to increase rapidly. In another, there is a cost-of-living crisis causing the travelling public to rethink their well-deserved holidays, which is causing the discounting of fares."
Brownjohn notes that while supply and demand are at play, the current situation is more nuanced due to capacity adjustments. "The Australian travelling public is used to seeing fares increase due to reduced capacity, but right now we are seeing airlines actively trying to attract passengers and feed them to parts of their network that are struggling. This is not just a simple sale to fill seats — this is an attempt to shift capacity to ensure routes are sustainable to ride out the current turbulence, but also to create availability elsewhere in the system where higher fares from more price-elastic consumers can be commanded to offset the losses elsewhere."
He describes revenue management as "the dark arts of aviation," where available inventory is constantly optimised to maximise yield. "Once a flight departs and that seat is empty, it is spoiled revenue the airline can never get back."
At RMIT University Aviation Academy, Brownjohn oversees flight training programs in Melbourne and Bendigo. With over 20 years of experience across Australia, Asia, and the Middle East, he focuses on network operations and commercial decision-making. To stay updated, sign up for emails from thewest.com.au.
