Plane Tickets: Explosive Prices – What’s Happening

By | May 14, 2023

Plane tickets: The sharp increase in ticket prices does not appear to deter consumers as demand for international travel is picking up strongly. Significant improvement in airline profits leaving behind the damage of the pandemic. All the news in

Airfares are soaring, well above inflation levels, as airlines try to take advantage of a resurgence in travel demand following the difficult time of the pandemic.

Data from specialist research firm Cirium shows that the average price of airline tickets on more than 600 of the most popular international routes rose 27.4% year-on-year in February (which is the most recent month for which data is available). ). This increase marked the fifteenth consecutive month with a double-digit rate of increase.

Is about level up more than double relative to inflation levels in major economies such as the United States and Europe.

As an indication, the average economy class price for a transatlantic flight from London (Heathrow) to New York (JFK) in February rose to $434, thus showing an increase by 23% compared to the corresponding month of 2019, that is, before the pandemic.

The average price for flights from New York to Singapore increased by 45% and from Dubai to Frankfurt by 51%.

Plane tickets: Cover the damages of the pandemic

An important part of the revaluations is attributed, according to their claims, to the strengthening of fuel prices (despite the fact that the price of oil has dropped significantly this year) and to the inflation of operating expenses due to the increase in salaries (employees required for punctuality and, most of the time, guaranteed increases). And especially for US airlines, it’s an additional aggravating factor. the strong dollar.

Likewise, several companies are gradually returning to fully operate all their routes, mainly due to lack of staff, which causes the demand to exceed the supply. But it is clear that most companies are simply trying to… recover from the damage of the pandemic thus contributing to the so-called bloat. phenomenon of “greed” (the inflation of greed).

According to IATA data, the industry was among the biggest losers from the pandemic with cumulative losses ranging from to 200 billion dollars.

Air tickets: High demand

In addition, the explosive increase in ticket prices did not prevent the plane to fill. The willingness of consumers to traveleven with these prices, confirm the dynamic recovery of travel demand within the last year. A fact of course that is reflected in the corresponding recovery of the financial performance of the companies in the sector.

Already in 2022 it is estimated that the earnings of the top ten international airlines jumped to $6.3 billionafter losses of $40 billion in the previous two years, according to FactSet data.

This image also continued in the first quarter, with a positive outlook also for the coming months, especially the critical summer period.

HE american airlines reported a record 37% increase in revenue with a profit of $10 million after posting a loss of $1.64 billion in the first quarter of 2022.

The German lufthansa announced its first profitable first quarter in three years at 791 million euros, prompting its jubilant CEO Carsten Spohr to characteristically declare that “Lufthansa is back!” In fact, the company has revised its estimates for the full year upwards, that is, in the summer season, despite admitting that he will have… he struggles to keep up with the strong demand!

IAG, its matrix British Airways, It reported earnings of £7.9m, the highest since 2019, while revising its full-year guidance upwards.

the same and Air France-KLM who claimed to have returned to the French State all the financial aid it had received during the pandemic and declared himself optimistic about a… commercially explosive summer with more than 95% occupancy.

Airfare: everything changes in air travel

The travel recovery continues unabated around the world, but changes are taking place that affect the way professionals travel for business.

From the first airline to fly a commercial passenger flight using 100% sustainable aviation fuel in 2021, to investing in electric flying taxis, major airlines are at the forefront of air travel evolution and innovation.

For example, United Airlines through its representative, Mr. Bob Schumacher, Director of United Kingdom, Ireland, Israel and Offline Sales, identified the key trends to watch in 2023 for companies where air travel is a business tool. essential and are included in a CWT survey.

Airfare: “alternative” airports are becoming popular

Ten years ago, the idea of ​​being able to fly from airports outside the main axes of the city and enjoying the same or even better comfort and service would have been almost unimaginable, but today, meeting these expectations is closer than when.

In the next 20 years, passenger demand for air travel is projected to double. IATA expects 7.8 billion passengers to fly in 2036, almost double the 4 billion air travelers expected to fly this year.

Travel to major US airports has already been blocked, according to Schumacher.

So now that traffic has returned, airports want to make sure they offer passengers an unforgettable experience.

In the New York area, for example, Newark Airport Terminal A is the latest in a series of multi-million dollar improvements to the city’s 3 major airports, JFK, LaGuardia and Newark.

United Airlines plans to expand its footprint to 15 gates, or nearly half of the 33 gates at the new $2.7 billion facility.

United’s New York/Newark hub is the airline’s largest transatlantic gateway, with the addition of 5 new European destinations in summer 2022.

By summer 2023, United will operate nearly 450 daily flights to 155 destinations in 46 countries from New York/Newark. Initially, JFK was seen as the gateway to New York, but Newark and LaGuardia are gaining ground and just as well connected.
Photo: TWA Hotel, John F. Kennedy International Airport (JFK)/Unsplash

In 2020, JFK had 8.3 million passengers and Newark had 7.9 million, so they were very close.

New York/Newark is across the bridge in New Jersey, but its proximity to Penn Station in midtown Manhattan is better than the other 2 airports.

Thus, after disembarking, the passenger is in the center of the city in 30 minutes. After all, the traveler seeks comfort and the less discomfort, the better.

And with passenger demand expected to double and travelers seeking alternative routes, there is likely to be increased demand for alternative airports in other major cities around the world, says Mr. Schumacher.

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