The weekly caps on international arrivals into Australia will halve in mid-July, with just 3,035 people allowed into the country each week on commercial flights. Informed sources say this cap is unlikely to increase for some time. Consequently, airlines are already raising fares and some are expected to axe their flights to Australia.

A tough regime for airlines about to get tougher

Airlines that have kept flying to Australia throughout the travel downturn have seen strict limits placed on them regarding the number of fare-paying passengers they can fly in. That's resulted in flights landing with just a few dozen passengers on them, most paying sky-high fares as the airline attempts to break even on the flight.

These passenger loads are determined by the number of quarantine beds available in the arrival city. All arrivals go straight into a 14-day self-funded hotel quarantine. Australian State Governments. manage quarantine beds and associated health and monitoring services. Several of the State Governments have led the charge for reduced arrivals caps.

Federal Government sponsored repatriation flights using Qantas Boeing 787s will continue and operate outside the 3,035 passenger limit. These flights have their own dedicated quarantine facilties.

Fares reach new highs

With airlines about to see allowable passenger numbers further cut, stranded Australians abroad are anticipating another wave of cancelations and further increases in fares. Over the weekend, one-way fares between London and Sydney reached a record high of US$28,582. Some 34,000 Australians remain stranded overseas and keen to get home.

A sample Google Flights search to travel one way between London and Sydney shows the one available flight on July 12 taking 31 hours. Passengers travel London (LHR) to San Fransisco (SFO) on British Airways before connecting to a United Airlines Boeing 787 down to Sydney (SYD). There are no economy class seats available. The business class fare is US$14,329.

Cheaper fares are available on other days, including economy class fares. But those traveling on the cheapest tickets are typically the first to get bumped. Airlines only know the final allowable passenger loads for a flight a day or two ahead. The number of available quarantine beds and international flights into the destination airport on the arrival day will determine the final allowable passenger load on a particular flight.

For passengers and airlines, it has been a calamitous regime. Now, with weekly arrivals halving, it will get worse. An inevitable consequence is higher fares as fewer passengers share the aircraft's operating costs. The other outcome is that airlines stop flying to Australia. While no airlines are yet to wield the axe, several high-profile carriers are revisiting the wisdom of continuing flights to Australia.

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Rumors airlines will begin axing flights to Australia

When it comes to keeping Australia connected, the big three United States airlines, Singapore Airlines, and the three big Gulf carriers are doing the heavy lifting. High cargo volumes are going a long way to offset the costs of flying to Australia.

In tandem with cutting the number of the weekly arrivals, the Australian Federal Government last week announced a four-stage plan out of the current mess. Unfortunately, that four-stage plan lacks hard details such as target numbers and timelines. It's a vague, motherhood-type statement that points to Australia remaining closed for the next 12 months.

However, in a small break, New Zealand is reopening the travel corridor to four Australian states on Monday. Subject to a positive pre-departure COVID-19 test, travelers flying in either direction between New Zealand and Victoria, South Australia, Tasmania, and the Australian Capital Territory can again skip the quarantine process. Australia's largest city, Sydney, remains in lockdown lite mode and quarantine free travel corridor flights to Sydney are on pause.