Flight prices expected to remain high for up to 3 years
Global aviation has taken off to a promising start this year, with the Pacific Asia Travel Association predicting a 71% growth rate for the region. The downside is that the recovering industry can’t get enough labour to keep up and the massive swell in demand has brought with it a massive swell in flight prices.
Travel restrictions have been lifted worldwide, allowing for easier and more convenient air travel. Even ultra-locked-down China has allowed travel to resume post-pandemic. But their delay in reopening left Asia lagging in recovery, as the World Tourism Organisation believes Europe and the Middle East will reach 80-95% of its pre-pandemic numbers this year.
There is massive pent-up demand from eager travellers, but the Covid-19 pandemic battered airlines to the ground, and getting back up has been challenging. Many went bankrupt, and layoffs were unavoidable across the whole industry. Some returned leased planes and now have to order new ones to replenish their fleet.
Two-thirds of all passenger planes were grounded and, by the middle of last year, 5,161 out of 28,674 planes in the world are still dormant, with Asia hosting the brunt of them. Estimates put 23% of all flights in Asia out of service due directly to China’s closure.
But things have steadily improved, and by the end of last year, global air traffic was up from 41.7% of pre-pandemic numbers in 2021 to 68.5% in 2022. Though, looking at December 2022, while flight capacity was at 77.9% of 2019 levels worldwide, they were only at 59.8% in Asia, according to the International Air Transport Association (IATA)
While there is massive demand to travel, a significant backlash has formed as flight prices have climbed to what many consider an unreasonable level. The overwhelming jump in demand was similar to that of cargo services during Covid when people were locked down, and prices soared.
Add to that the huge spike in jet fuel prices, which rose by nearly 80% in 2022, and the costs of getting flight services reestablished, and you have a recipe for painfully high ticket prices.
Experts believe prices will stay high until more planes can get up and running and the demand is no longer outpacing the available flights and seats. The additional cost of staffing to fill the shortage and fluctuating jet fuel prices may further hinder price easing. Some in the industry are predicting the price surge to last for two or even three years coming out of the pandemic.
The only good news is that domestic flights have recovered more quickly and prices for flights within Thailand have recovered significantly. Meanwhile, Thai AirAsia says their international flight rates will be up 20% and average flight prices to China are up 50% all around.
Flights from Europe are expected to remain above 40,000 baht, and flights from Japan are between 26,000 and 35,000.
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