The great Aussie airfare rip-off

Why does it cost more for Australians flying overseas than it does for passengers coming the other way?
Why does it cost more for Australians flying overseas than it does for passengers coming the other way? Photo: AFP

It’s possibly the most infuriating issue Australian travellers face and it’s unique in the world: the travel trade deliberately blocks Australians from using cheap airfares freely available to travellers overseas.

It’s never been explained, excused or even talked about in the industry: the Great Aussie Travel Joke exists because ... it does. Yet, there is no other issue among travellers that has been more consistently complained about in my experience.

It mostly concerns travel on the world’s longest air route between Australia and Europe: if you buy a ticket in Australia, it can be considerably dearer compared with the discount price if you buy it in Europe.

If you go to Orbitz or Skyscanner, for example, you can find a return fare from London to Sydney in the current low season, which ends at the start of December, for around $A1300.

If you buy a seat in the same period from Sydney to London, you’re up for a minimum of around $1460.

I’ve previously found periods where the difference was $500 or more.

You can’t get around it by buying two one-way fares as international airlines still add a premium for single tickets, unlike domestic travel, which now revolves around cheap one-way rates: simply double it to get the return fare.

I’ve also found significant differences in fares between Australia and the US, though at the moment, checking availability a month out, it appears to be slightly cheaper from the Australian end.

Of course, there’s nothing stopping airlines and travel retailers charging whatever they like for air tickets.

But it seems to me the assumptions that are made about Australians by the travel trade are the same assumptions that have caused anger against local general retailers and a flight to direct sales on the internet.

As an island continent supplied from afar for everything that couldn’t be grown or made locally, a whole host of cosy deals have been done in the past 200 years between retailers and wholesalers.

That was all smashed by the internet – the quantum leap that turned the planet into one big global showroom which meant someone could sell cheap socks from a warehouse in South America to someone with a laptop in Oodnadatta as air freight companies became the cost-competitive just-in-time supply chain.

In the case of airfares, there was nothing to ship at all, but national competition regulators have struggled to keep up. In Australia, the redrawn Trade Practices Act (now called the Competition and Consumer Act) is still being tinkered with to reflect the new reality than pretty much anyone can buy anything from anywhere.

But there are still relics of the old sweetheart deals under which, for example, manufacturers discourage direct sales of golf clubs to Australians from golf shops in the US.

And it’s more than Australia’s location that accounts for the fact that clothing sells at around half price in US shops compared with Australia’s.

The ACCC has been active in ensuring that there isn’t cartel activity still hanging around in the air transport industry, which has a poor track record. Airlines have been fined millions for collusion over freight rates and Australia’s biggest travel retail, Flight Centre, is also defending allegations of price collusion with airlines.

The use of anti-competitive devices still appears to me to be present in the way airfares are sold to consumers through wholesalers and retailers.

Sellers in a global market appear to be discriminating against some consumers depending on their IP (internet protocol) address – that is, ther physical location. In other words, whether you pay $1300 or $1600 for a London-Sydney return fare may depending on whether you’re Australian or not.

I would like to document as many examples of this as possible, so tell us  your experiences.

Is this a problem you’ve encountered? Were you able to work out a way around it? Do you think Australians should be paying the same as the rest of the world for long-haul flights? Post a comment below.

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