A somewhat literary or refined word for a pleasant smell, often used for flowers, incense, or elegant settings.
The fragrance of flowers is drifting through the garden.
The white plum blossoms are quietly giving off their fragrance.
The fragrance of sandalwood was drifting through the room.
The tea room was enveloped in a quiet fragrance.
匂い is a neutral, everyday word for any smell, pleasant or not, whereas 香気 refers specifically to an elegant, pleasant fragrance.
香気 refers to fragrant air or scent in formal writing, whereas 薫 is rarer and carries a more classical, poetic feel.
悪臭 is a foul, unpleasant odor, the direct opposite of the refined, pleasant fragrance described by 香気.
Sino-Japanese compound of 香 (fragrance) and 気 (air, atmosphere).