In 2022, the gradual return of travel demand after the lifting of COVID-19 restrictions prompted several regions around the world to increase ticket prices.
But this year, as airlines seek to regain pre-COVID-19 passenger numbers, price volatility has peaked.
In France, in April, travelers had to pay an average of 32.6% more than four years ago for the same flight. This increase reaches up to 51% for flights from France to the Asia-Pacific region.
In the United States, the price index for transport tickets published by the Federal Reserve of St. Louis shows an increase of 11% between April 2019 and April 2023.
These increases are recorded despite the stability of kerosene prices, after peaking following the start of the Ukrainian crisis 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 accounts for 25-30% of airline costs and typically has a significant impact on ticket prices. However, the price drop is long overdue.
In addition to fuel, “labour and other costs associated with the supply chain (…) are either higher or rising,” says Mary Owens Thomsen, chief economist of the Air Transport Association.
“Companies must find a way to cover these costs, otherwise they will start losing money again,” she said earlier this week in Istanbul during the general assembly of her organization, which brings together 300 airlines in the world. crisis.
scarcity and hypertrophy
And aviation industry expert at the “McKinsey” Strategic Advisory Center Vic Krishnan believes that the main problem is not so much “oil prices as the lack of sufficient seats in high-passenger planes”. ”
Although their order books are sometimes full until the end of the contract, aircraft manufacturers are struggling to meet their delivery targets due to shortages of parts or materials from their suppliers.
There’s also the issue of “labour cost, and many companies have had to negotiate higher salaries for pilots and cabin crew,” according to Bain & Company consultant Geoffrey Weston.
This is also the case for ground operations companies who have had to “pay much higher salaries because of covid-19” to porters and mechanics, he says.
“There are not many factors that can lower the price of tickets,” says Pascal Fabre, expert in the aeronautics sector at Alex Partners.
The boss of the Spanish low-cost airline Bolotea, Carlos Muñoz, confirms that these high prices have not affected travel demand so far, explaining: “With my counterparts, we all have the same impression, the demand is still very strong despite (headwinds) in the macroeconomy.”
But even though aviation will need to invest billions of dollars in an attempt to decarbonize by 2050 in new planes and renewable fuels, Mary Owens Thompson sees no respite for consumers.
“Costs will increase until we have commercially viable solutions that are mass-produced…by 2040 maybe,” she says.
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