Airfares up 27% but you can still find a cheap Christmas holiday: Here’s how

Here are 9 ways to keep your summer travel budget on track.

Domestic airfares are still on the rise with consumer watchdog the Australian Competition and Consumer Commission (ACCC) reporting a 27% increase in October 2022 compared to 2019.

It's a trend that honestly doesn't seem to be falling anytime soon. And with Christmas right around the corner, you might be thinking, "Is it just too expensive to travel this summer?"

While there's no denying the price rise, there are ways you can keep more dollars in your pocket while still getting away. Here's how:

1. Drive instead of fly

As airfares continue to increase in the lead-up to the festive season, hopping in your car might well be a more budget-friendly option than onto a plane.

This works well if you have a family of 5 – especially with kids who command a plane seat to themselves.

To keep those pesky fuel costs low, use a fuel price app along the way and invest in a rewards program so you can get a little bit of cash back in your pocket later on.

Another option is to book a rental that includes fuel (yes, these do exist). One new kid on the block that does this is KINTO. It charges a flat rate based on time and distance with fuel, insurance and standard cleaning embedded into the cost.

Prices start at $9.75 per hour plus 30 cents per kilometre for a Toyota Yaris. To put costs into perspective, a 5-day trip from Sydney to Byron Bay return (1,523 kilometres) would set you back $605.06.

Looking at online travel agent KAYAK, the cheapest return fare is $486 per person to fly during peak Christmas dates (23–27 December).

2. Avoid flying between 22 and 24 December

Once the silly season has kicked in and the kids are off school then peak season starts – and its peak prices. According to Air New Zealand 23 December is predicted to be the busiest day of the year with over 55,000 flying on the airline.

Instead of braving it alongside the thousands (and paying the price for it, too), try flying out the week before to steal some extra savings.

3. Travel on Christmas Day

December 25 is notoriously one of the cheapest days to fly over Christmas week as it's the least desirable day to be in the air.

If you don't mind spending part of the public holiday in the sky, you could save yourself a pretty penny compared to flying in the days before.

4. Travel in January instead

Feel you've missed the boat on your dream Christmas holiday? Perhaps the price point still isn't quite where you need it to be?

Consider skipping travelling over Christmas and taking a late summer holiday break instead.

The school term doesn't start until late January to early February in Australia anyway. You can still make the most of a family trip without breaking the bank.

5. Use your reward points

Points-rich but cash-poor? Classic Rewards seats over Christmas are few and far between this late in the game. However, you do still have the option of Points Plus Pay.

This is where you use your points to offset some or all of your flight costs.

It's a more expensive option than redeeming a reward seat but if you're willing to sacrifice points, it can mean more money in your hip pocket for the flight that you want.

6. Travel to less touristy locations

This doesn't mean flying to the middle of nowhere – just to a less major destination.

For example, when looking at KAYAK for the cheapest flights from Melbourne to anywhere between 23 and 27 December, Launceston, the Gold Coast and Mildura come up as some of the cheapest destinations at under $430 return.

7. Consider flying in Flexible Economy or Business Class

According to the ACCC, "Flexible economy and business airfares have not increased as much as discounted fares, and in November 2022 they remained below pre-COVID-19 prices."

In saying this, it might be worth scoping out how much difference a higher-tiered seat will cost you.

For example on Virgin Australia, an upgrade from Lite to Choice costs $30 each way on a domestic flight and gives you checked bags, plus you can select your seat and change flights more than 14 days in advance.

On Qantas, you can fly from Melbourne to Hobart on 23 December from $424 as part of a Red e-Deal. An upgrade to Flex costs $488 and gives you the option to make changes up to 30 minutes before the scheduled departure time.

8. Bank on last-minute sales

For anyone who's not fussed if they manage to travel over Christmas or not, a last-minute deal could be a winner.

In 2019, Virgin Australia hosted a Happy Hour where it took 50% off flights taking off on Christmas Day.

There's no indication of whether or not Virgin Australia will rehash this Christmas Day sale. We'll keep you posted on our Flight Sales page if it does.

9. Fly without luggage

Jetstar and Virgin Australia both serve budget-style fares for those with lighter wallets.

These are seat-only fares where you'll be able to bring 7kg of baggage on board with you.

Considering it's summer, you may be able to get away with this little luggage.

Get in early for Christmas 2023

With seasonal flights, the early bird really does catch the worm.

To make sure you don't miss out next Christmas, start looking for flights as early as January.

You can set up price alerts to snatch up fares when they drop or sign up for frequent flyer points to put your points towards your holiday instead.

This article was originally published on 8 December 2022 and updated on 13 December 2022 with extra information from Air New Zealand.