12 Reasons Air Travel Continues To Skyrocket in Price
International travel costs have soared since the pre-COVID era, according to a user in an online forum. In the past, round-trip flights from the U.S. to Europe or Asia have cost less. But since the lifting of COVID-related travel bans, prices haven’t normalized. Here are reasons behind this spike, prompting discussions among other participants online.
1. Reduced Flight Availability Drives Up Prices
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Airlines oversold flights last summer, causing operational issues. To avoid a repeat, they’re scheduling fewer flights this summer. This reduction in availability has resulted in higher prices for travelers.
2. Supply-Demand Imbalance
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The surge in demand and limited capacity are the main factors contributing to the expensive nature of air travel. Additionally, airlines have limited control over external factors such as airports, handling agents, and air traffic control, making it challenging to address issues that may impact their operations and pricing.
3. Authority Directives and Low Staffing
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Airlines have reduced their flight schedules due to directives from the Federal Aviation Administration (FAA) regarding low staffing levels in air traffic control (ATC) and other aviation jobs. This staffing shortage, affecting both aviation and non-aviation companies, is one of several factors contributing to the current situation in air travel.
4. Intentional Price Hike
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Someone in the forum references an interview, where Michael O’Leary, the CEO of Ryanair, expressed his perspective on the current state of the airline industry. According to O’Leary, there is a deliberate effort to keep prices high, and he believes it will take at least five years for prices to normalize.
5. The Russia-Ukraine Factor
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The airline industry has suffered major setbacks from Russia stealing planes, leading to significant financial and capacity losses. One user notes that Russia has confiscated many aircraft that are unlikely to be recovered, which will significantly impact the industry’s resources.
Airspace restrictions over Russia and concerns about flying over conflict areas like Ukraine have compelled airlines to take longer, alternative routes. This has resulted in increased distance and flight durations. These factors, especially the increased duration and cost of flights originating from Europe, contribute to higher prices.
6. Premium Seat Expansion
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Referencing The New York Times, someone says the publication wrote about how airlines are expanding their premium seats, undermining affordable options’ availability.
7. Pilots Negotiating High Salaries
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Another user points out that the pricing dynamics in the airline industry are unlikely to return to pre-COVID levels. One contributing factor is the current pilot shortage, leading to increased salaries as airlines work to attract and retain qualified pilots. As pilots negotiate new contracts, the rising costs associated with their salaries are expected to impact ticket prices.
8. Airlines Making up for Lost Time
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One individual suggests that airlines may attempt to recoup the losses incurred during the pandemic by keeping prices high. However, another individual counters this argument by highlighting the substantial bailouts received by airlines and their subsequent record profits. They say airlines have not only recovered financially but have also made significant gains.
9. Customers Won’t Stop Flying
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Many people acknowledge that the high prices persist because there is still a willingness to pay for air travel. But there is a growing concern that the cost may soon become unjustifiable for regular trips.
10. Businesses Are Not Helping Matters
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Many people question the necessity of frequent air travel, as some businesses insist on in-person meetings that could be conducted online. One individual shared a personal experience where their husband’s company initially planned to send him on another cross-country trip but reconsidered after he demanded a premium ticket.
This highlights the perceived exaggeration of the “need” for air travel by certain businesses, as many employees can effectively fulfill their roles without physically traveling.
11. Demand Inelasticity
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When prices increase, and consumer demand shows inelasticity, suppliers can set prices at exorbitant levels. This occurs when consumers are less responsive to price changes and continue to demand the product or service despite the higher cost. The lack of price sensitivity gives suppliers greater control over pricing, allowing them to exploit the situation and potentially charge excessively.
12. Inflation
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Perhaps, this is the ultimate reason. Everyone can attest to the biting economy, and airlines are not exempted. Increasing fuel prices, higher expenses for aircraft components and maintenance services, and rising labor costs all contribute to the upward trend in ticket prices. Airlines must adjust prices to cover these increased costs and maintain profitability in a competitive market.
Source: Reddit
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