About the Index

Sydney, Australia, 16 October 2026 – 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 economy.

The analysis compares the cost of Flight Centre Corporate’s average booked airfares and general 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. Australia rolled out COVID vaccines in 2021, international borders reopened during 2022, and 2023 was the first year we saw travel operating at normal levels again," Ms Elf said. 

According to the Reserve Bank of Australia, a basket of goods and services valued at $1 in financial year 2023-24 would cost approximately $1.11 in financial year 2025-26, representing an 11 per cent increase over the period¹.

What’s driving airfare pricing

Jet fuel prices surged more than 40% between February and June this year, creating immediate pressure on airline operating costs.¹²

Ms Elf said airfares continued to be influenced by structural market factors rather than temporary cost spikes alone.

"While some of those increases were reflected in fares, competition, capacity and customer demand continue to shape pricing outcomes," she said. 

“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.

“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.

"That means there will continue to be periods where travellers see pricing pressure, particularly on popular domestic and international routes, but the longer-term picture is much more stable than many people assume."