More Airline Capacity - Lower Business Class Prices
We recently shared that Singapore Airlines is expecting lower prices in 2023 as more airline capacity is forecast to come online. We haven't yet seen this translate into lower airfares - Business Class airfares with the major carriers to the UK / Europe remain stubbornly high compared to pre-Covid levels.
First Class prices with Emirates and Singapore Airlines remain viable alternatives to last minute Business Class prices.
China's gradual softening of its Covid regulations may result in more capacity from the likes of China Southern, but it will still require strong forward bookings from Chinese tourists to warrant allocating the capacity.
For those open to trading-off longer flight times for lower prices, alternatives like Air Tahiti Nui to Paris are available.
Pros and Cons of a Recession for Travel
In the current travel environment of high demand and tight supply, a domestic recession in 2023 could have interesting consequences for airfares. Economic uncertainty and unemployment could soften the demand for long-haul travel which may make it easier to get seats (and potentially local discounting to fill flights).
However, if global demand for aircraft remains high, airlines could reallocate aircraft from New Zealand routes to higher yielding overseas routes which could maintain the upward pressure on prices.
Plan ahead for Holidays Closer to Home
If belts tighten next year we may see a switch to close to home holidays to popular destinations like the Cook Islands and Fiji (both destinations I can assist with).
Some destinations in Asia are still working to attract guests with lower room rates which may also help balance the travel budget.
As more airlines return to Pacific Island destinations we'll find availability of rooms harder to come by and therefore planning ahead will be important.
