Plane tickets: The sharp rise in ticket prices does not seem to be deterring consumers, with demand for international travel picking up strongly. Significant improvement in airline profits leaving behind the damage of the pandemic. All developments on xristika.gr.
Airfares are exploding, well above inflation levels, as airlines try to take advantage of the resurgence in travel demand after the difficult period of the pandemic.
Data from specialist analytics firm Cirium shows that the average price of airfare on more than 600 of the most popular international routes rose 27.4% year-on-year in February (the most recent month for which data is available). The increase marked the 15th consecutive month with a double-digit growth rate.
It is rise to a level more than double compared 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, showing an increase by 23% compared to the corresponding month of 2019, i.e. before the pandemic.
The corresponding average price for flights from New York to Singapore increased by 45% and from Dubai to Frankfurt by 51%.
Plane tickets: They cover the damage of the pandemic
A significant portion of the revaluations is attributed, according to their claims, to firmer fuel prices (despite the fact that the price of oil dropped significantly this year) and the inflation of operating expenses due to the increase in wages (employees due to punctuality required and, most often, insured). And especially for American airlines, this is an additional aggravating factor the strong dollar.
In addition, several airlines are slowly resuming full operations on all their routes, mainly due to lack of staff, causing demand to exceed supply. But it’s clear that most companies are just trying to…recover from the damage of the pandemic thus contributing to the so-called bloat greedflation phenomenon (the inflation of greed).
According to IATA data, the industry was among the big losers from the pandemic with cumulative losses ranging from at $200 billion.
Plane tickets: High demand
Moreover, the explosive increase in ticket prices did not prevent the plane to fill. The desire of consumers to journeyeven with these prices, it confirms the dynamic recovery of travel demand over the past year. A fact of course that is reflected in the corresponding recovery in the financial performance of companies in the sector.
Already in 2022, it is estimated that the profits of the ten main international airlines jumped to $6.3 billionafter losses of $40 billion in the previous two years, according to FactSet data.
This picture continued into the first quarter as well, with the outlook also positive for the coming months, especially the critical summer period.
THE American airlines announced 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.
German Lufthansa announced the first profitable first quarter in three years at 791 million euros, leading its jubilant CEO, Carsten Spohr, to characteristically declare that “Lufthansa is back!”. Indeed, the company has revised upwards its estimates for the full year, namely, in the summer season, even if we have to admit that it will have…difficulty meeting the high demand!
IAG, its parent company British Airways, reported profits of £7.9million, the highest since 2019, while revising its full-year forecast upwards.
The same and Air France-KLM who said he had reimbursed the French state for all the financial aid he had received during the pandemic and declared himself optimistic for a summer… commercially explosive with more than 95% occupancy.
Plane ticket: everything changes in air transport
The travel recovery continues unabated around the world, but changes are occurring that affect the way professionals travel for business.
From being the first airline to operate a commercial passenger flight using 100% sustainable aviation fuel in 2021, to investing in electric flying taxis, major airlines are at the forefront of evolution and innovation. innovation in air transport.
For example, United Airlines, through its representative, Mr. Bob Schumacher, Director of UK, Ireland, Israel and Offline Sales, has identified the key trends to watch in 2023 for companies where air travel is an essential business tool and is included in a CWT survey.
Airline ticket: “alternative” airports are becoming popular
10 years ago the idea of being able to fly from airports outside the main city hubs and enjoy the same or even better comfort and service would have been almost unimaginable, but today , meeting these expectations is closer since when.
Over the next 20 years, passenger demand for air travel is expected to double. IATA expects 7.8 billion passengers to travel in 2036, nearly double the 4 billion air travelers expected to travel this year.
Already, major US airports have been banned from travel, according to Schumacher.
So now that traffic has returned, airports want to make sure they provide passengers with an unforgettable experience.
In the New York area, for example, Newark Airport’s Terminal A is the latest in a series of multi-billion dollar upgrades to the city’s 3 major airports, JFK, LaGuardia and Newark.
United Airlines plans to expand its footprint to 15 gates, 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 considered the gateway to New York, but Newark and LaGuardia are gaining ground and are 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 city center in 30 minutes. After all, the traveler is looking for convenience and the less hassle the better.
And, with passenger demand set to double and travelers looking for alternative routes, there is likely to be more demand for alternative airports in other major cities around the world, Schumacher comments.