Why are flight tickets expensive? High airfares may become new normal, Asia Pacific airline body chief explains
High airfares could become a long-term feature of air travel as airlines grapple with soaring jet fuel prices and rising operating costs, the head of the Association of Asia Pacific Airlines (AAPA) has warned, according to an Associated Press report.
Wong Hong, director-general of the AAPA, which represents 18 airlines across the Asia-Pacific region, said carriers were attempting to keep ticket prices under control while safeguarding their finances.
Airlines are also reportedly wary of raising fares too sharply, as higher prices could discourage passengers from travelling.
However, the aviation industry is facing a significantly different cost environment compared with a year ago, Wong said.
Jet fuel prices have climbed from around $80 a barrel a year ago to approximately $180 currently, putting additional pressure on airline finances.
Why airlines may keep airfares high
Fuel accounts for roughly one-third of an airline’s operating expenses, making fluctuations in jet fuel prices a major factor in determining ticket prices and profitability.
Speaking after an AAPA conference, Wong was asked whether high airfares were likely to become a permanent feature rather than a temporary response to rising costs.
“I believe so,” he said, adding that airlines were operating in “completely different market conditions” and a different cost environment.
He said the prevailing conditions suggested that elevated prices could continue, indicating that passengers may have to contend with higher travel costs for an extended period.
Will airlines raise ticket prices further?
Asked whether airlines could introduce another round of fare increases if fuel prices remained elevated, Wong said there was no straightforward answer.
He pointed out that passengers’ sensitivity to higher ticket prices varies across markets, making it difficult for airlines to adopt a uniform pricing strategy.
Carriers must therefore balance the need to recover rising fuel and operating expenses against the risk of pricing passengers out of air travel.
Iran war adds to pressure on global airlines
Airlines across the Asia-Pacific, Europe and North America have already responded to rising fuel costs since the Iran war began in late February.
Several major carriers have raised base fares, increased fuel surcharges or introduced additional fees to offset the higher cost of operations.
With jet fuel prices remaining elevated, the pressure on airlines to adjust ticket prices is likely to persist.
The developments could make air travel more expensive for passengers, particularly if carriers are unable to absorb further increases in fuel and other operating costs.
