Rising Airfares in 2025

The shift to greener aviation has accelerated, with over 350 European and UK airports now requiring at least 2% of fuel to be sustainable. However, SAF is roughly double the price of traditional jet fuel, creating significant cost pressures for airlines globally. This, paired with supply chain delays affecting new fuel-efficient aircraft, is keeping operational costs high while limiting capacity for expansion.

International fare prices reflect these difficulties, with current “discount” tickets far exceeding deals from just two years ago. For example, economy fares for Australia-Europe routes now start at $1700–$1800, compared to rates as low as $1398 in 2023. Business class tickets are similarly elevated, beginning at $7749 for key international destinations.

Load factors—the percentage of seats filled on flights—have reached record highs, with Asia-Pacific airlines at 85% and global averages around 83.4%. High demand and constrained capacity make it unlikely for passengers to enjoy lower fares or even extra space onboard in the near term.

Meanwhile, governments worldwide are rolling out environmental directives. SAF mandates are expanding globally, with Singapore introducing a 1% rule in 2024 and other key markets like Canada, Japan and India set to follow within five years. In Australia, the government is still debating SAF mandates, although the country currently has no local production facilities, further complicating the issue.

Source: The Financial Times, The Australian, UK Gov