Travel

Expensive tickets are not the main factor in post-COVID travel

As rising fuel prices pushed up airfare significantly, airlines were initially concerned about its impact on returning passengers. However, judging by the past couple of months, ticket price hikes don’t seem like much of an issue in the post-COVID world.

Prices are going through the roof, but so much demand!

Something unusual is happening these days! Airlines have been forced to increase airfares due to the global rise in fuel prices. Passengers are no doubt not thrilled about this; they whine about it but are still heading to the airport in record numbers.

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With the pandemic seemingly behind us, passengers have apparently put up with the high price of airfare to experience the sweet freedom of carefree travel that has been denied them for the past two years.

Passengers are rushing to airports despite high airfare. Photo: Getty Images

And the airlines don’t complain! Delta Air Lines CEO Ed Bastian told a recent industry conference that despite summer fares being 30% higher than pre-COVID days, demand is off the charts, adding:

“It comes with leisure, it comes with premium clients, it comes with business, it comes with international. The category doesn’t matter.

Bloomberg notes that this is a worldwide trend, covering all categories of travelers and all regions. The report indicates that direct flights between London and New York cost more than $2,000 in economy class, while an economy round trip between Germany and Singapore could cost you more than $3,600.

However, more than two years of unsatisfied demand means passengers are willing to shell out extra money for a long overdue break.

Fuel continues to cause discontent

It’s good that passengers are not put off by rising airfare prices, because looking at world oil prices, one can assume that they will remain in the near future. A Bloomberg report says spot jet fuel prices in New York are up more than 80% this year, but that varies by region. However, most US carriers have only managed to survive this onslaught by passing them on to travelers in the form of higher fares.

Asia is particularly vulnerable to price fluctuations given that many airlines in the region do not hedge jet fuel. Then another regional dynamic comes into play. For example, in India, the fuel tax structure means that it accounts for more than 40% of total operating costs. However, all recent polls and reports show that passengers are itching to board a plane in the country.

Fuel accounts for more than 40% of airline spending in India, yet surveys show that Indians are taking to the skies in huge numbers. Photo: Getty Images

Will it continue?

While passengers may feel generous right now grabbing their wallets, it remains to be seen how long they can keep up with it. The new phrase has gained popularity in…

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