Air fares expected to increase

Remember when Koffee said, “Where will we go, when the quarantine thing done and everybody touch road?” Well, for some of us, the answer is nowhere! It’s too expensive to be outside! Everything gone up, including airfare. 

In this post-COVID, post-social distancing era, travelling and visiting new places has been extremely popular. I’m sure you’ve seen a massive increase in the number of travel influencers on TikTok and IG. 

People were cooped up in the house for almost three years, so now that the doors are open, everyone wants to be outside. And I’m not just making that up. 

The International Air Transport Association, IATA, says global airline revenue will reach a record high of nearly US$1 trillion in 2024. That’s about five billion travellers on airplanes this year.

But while business is booming for airlines, travellers’ pockets have been taking a hit. 

The IATA says it expects the cost of air travel to continue to increase. 

The association said several things are at play when it comes to ticket price increases, BUT the main culprit is inflation.

Globally, the cost of living and doing business has gone up dramatically since the pandemic.

Let me break it down. So, airline ticket prices have been going up ever since travel became a thing again in 2021. According to the US Bureau of Labor Statistics, airfares peaked at an average of US$320 per ticket in Summer 2022. Prices have levelled out since then, but there’s been another uptick.

In addition to high inflation, there’s also the rising cost of jet fuel, which is roughly a third of all airline expenses.  According to IATA, the cost of jet fuel on June 7 was US$95 per barrel. Plus with increased travel demand, planes have to be refuelling more often.

Plus there is a global push for the aviation industry to decarbonise. But the jet fuel alternative, ‘sustainable aviation fuel’, is limited. So airlines have to fight over who gets it.

AND THEN! The pandemic also caused a slowdown in the production of new planes. Now airlines are keeping older planes that burn more fuel flying longer. 

I’m sure you’ve also seen several news stories about planes basically falling apart mid-flight. Plane manufacturer, Boeing, has been having a rough couple of years. A few of their fleets have been grounded and production stalled due to design flaws. Again, this leads to older aircraft staying in rotation past their prime.

The production slowdown also means there aren’t enough new planes to expand routes and increase supply which would bring ticket prices down.

Then on top of that, there’s a shortage of pilots and flight attendants. 

So, it boils down to a supply and demand issue. The travel demand is great, but because of all those issues, airlines don’t have the supply.

And so prices go up. And we’re just about getting into the swing of summer, so the demand is gonna be even crazier. A staycation isn’t sounding too bad now.

And that’s the bottom line.