According to aviation experts, airfare prices are likely to continue to rise in the long term, despite the recent drop in oil prices.
In 2022, a gradual recovery in travel demand following the lifting of COVID-19 restrictions prompted several regions around the world to raise ticket prices.
Poll. Global travel and tourism sector will not fully recover by the end of 2023
But this year, as airlines race to restore pre-COVID-19 passenger numbers, price volatility has peaked.
In France, travelers had to pay an average of 32.6% more for the same flight in April than four years ago. This increase reached 51% for flights from France to the Asia-Pacific region.
In the United States, the travel ticket price index published by the Saint-Louis Federal Reserve shows an increase of 11% between April 2019 and April 2023.
fuel prices
This growth is being recorded despite the stability of kerosene prices after peaking after the start of the Russian invasion of Ukraine in February 2022.
The International Air Transport Association estimates that prices will fall to $98.5 a barrel this year from $135.5 a barrel last year.
Fuel makes up 25 to 30% of airline costs and usually has a significant impact on ticket prices. However, price cuts are long overdue.
In addition to fuel, “labor and other costs associated with the supply chain (…) are either higher or rising,” says Air Transport Association Chief Economist Mary Owens Thomsen.
“Companies need to find a way to cover these costs or they will start losing money again,” she said earlier this week in Istanbul during a general meeting of her organization, which includes 300 airlines around the world. a crisis.
deficiency and hypertrophy
And an expert in the aviation industry at the McKinsey Strategic Consulting Center, Vic Krishnan, believes that the main problem is not so much in oil prices, but in the lack of seats on planes with a large number of passengers. “
Although their order books are sometimes filled to the end of a contract, aircraft manufacturers struggle to meet their supply plans due to shortages of parts or materials from their suppliers.
There’s also the issue of “labor costs, and many companies have had to negotiate higher salaries for pilots and flight attendants,” according to Jeffrey Weston, a consultant at Bain & Company.
This also applies to ground operations companies, which have had to “pay much higher wages due to COVID-19” to porters and mechanics, he said.
“There aren’t many factors that can drive down ticket prices,” says Pascal Fabre, aviation expert at Alex Partners.
The head of Spanish low-cost airline Bolotea, Carlos Munoz, confirms that these high prices have not yet affected travel demand, explaining: “All my colleagues have the same impression, demand is still very strong despite (headwinds) in the macro economy.”
But even though aviation will have to invest trillions of dollars to try to decarbonize new aircraft and renewable fuels by 2050, Mary Owens Thompson sees no respite for consumers.
“Costs will continue to rise until we have commercially viable solutions that are mass-produced (…), possibly by 2040,” she says.
