Here's a rare bit of good news for anyone in Australia with an overseas trip on the horizon: international economy airfares are actually cheaper than they were three years ago. Flight Centre Corporate's annual Airfare Inflation Index shows the average one-way international economy fare booked ex-Australia fell seven per cent between the first half of 2023 and the first half of 2026, from $989 down to $915. Over the same stretch, general cost-of-living inflation ran at around 11 per cent, according to Reserve Bank of Australia figures.

Put another way, flying overseas has risen more slowly than almost everything in your weekly shop. In the index's comparison basket, apples jumped 35 per cent, takeaway coffee 25 per cent, bread 18 per cent and milk 14 per cent. Even petrol — often blamed for fare rises — climbed five per cent, while jet fuel spiked more than 40 per cent between February and June 2026 alone.

So why haven't tickets followed fuel skyward? FCM Travel and Corporate Traveller Global COO Melissa Elf points to competition, capacity and demand doing more work on pricing than fuel spikes in isolation. Temporary shocks — like the recent Middle East conflict — can push prices up quickly, but she argues the market has matured enough that these tend to balance out over time, with airlines largely absorbing high operating costs rather than passing them all on.

The picture isn't uniformly rosy, though. International business class fares rose four per cent over the period, from $4,553 to $4,747 one-way, and domestic economy fares climbed 10 per cent, from $394 to $434 — though that's still slightly under inflation. And it's worth noting this is an Australia story: international economy fares out of New Zealand recently jumped 21.5 per cent, their biggest annual rise since 2023, so the trend doesn't cross the Tasman.

For travellers, the takeaway is that airfare growth has been far more restrained than the cost-of-living headlines suggest, especially if you're flying internationally. Elf's advice: plan ahead, steer clear of peak periods where you can, and use fare data rather than gut feel when booking. If you've been putting off an overseas holiday because everything else got more expensive, the flight leg of your budget may be the one thing working in your favour right now.

Story via Karryon.