Looking for a cheap flight to Thailand? Don’t count on it just yet says airline industry executives.
The world’s industry chiefs made known, as if we didn’t already know, that airfares are expensive and they expect to remain that way for the time being.
Flights are pricey for a number of reasons, ranging from surging fuel costs, labour shortages, and a lack of planes, would you believe?
The US Labour Department revealed the consumer price index (CPI) for airfare was up 43% in September from a year earlier.
Trade group Airlines for America reported that ticket prices were still depressed last year but airfares in the CPI were up 8% from September 2019.
Airlines reportedly counterbalanced their operations after a turbulent start to the summer that was hit by cancellations and delays. They did it by cutting back on flights and airline chiefs reckon the industry’s growth will be hemmed in for the time being.
Southwest Airlines chief operating officer Andrew Watterson admitted the situation is unusual.
“You have demand quickly outstripping supply like this. I think we have a couple of years where demand and supply may not be as aligned as it was pre-pandemic.”
The higher fares helped cover about 80% increase in jet fuel prices and revenues over the summer that beat those in 2019.
Prices have reduced in recent months but industry executives aren’t expecting any low fares anytime soon.
Flights departing in March 2023 are averaging US$350 a domestic round-trip ticket — 26% higher than last year and 28% above 2019.
Ryanair reported a 14% rise in ticket prices across its short-haul network over the summer compared with 2019.
Ryanair chief financial officer Neil Sorahan said…
“There has been a structural change in capacity in Europe over the last two years. The days of the kind of 9.99 euro (US$10) fares are probably gone.”
United Airlines CEO Scott Kirby said…
“Pilot shortages, aircraft delivery shortages from both Boeing and Airbus, Air Traffic Control saturation and airport infrastructure constraints around the world are all real, and they are constraints that will take years to fully resolve.”
Airports in Toronto, Amsterdam, London, and Sydney all labour shortages and operational challenges as they tried to return to pre-pandemic operations.
Deutsche Lufthansa chief executive Carsten Spohr said…
“There are many still-unfilled vacancies at airports, ground service providers and security check organizations around the world, continuing to limit any significant capacity expansion.”
Plane delivery delays, spare parts shortages and maintenance slots have also affected an airline’s ability to operate.
Furthermore, dozens of airlines have gone out of business or scaled back their operations as Covid-19 travel restrictions took their toll while the pandemic forced British Airways and Virgin Atlantic Airways to permanently retire 747 superjumbos. That capacity hasn’t returned, leading to fewer jumbo jets operating in key markets.
It sounds all doom and gloom at the moment. It is true the airline industry is ailing but in time it expects to be back on the runway and ready for takeoff with a reasonably healthy price that won’t burn a hole in consumers’ pockets.