The cost of your next flight is likely to go up, industry group warns
FILE - General Electric GE9X engine on a Boeing 777X during the Farnborough International Airshow 2022 on July 18, 2022, in Farnborough, England. (Photo by John Keeble/Getty Images)
Planning to travel soon? The cost of your next flight is likely to go up, according to an aviation trade group and industry heads.
The International Air Transport Association (AITA) held its annual meeting on Monday in Dubai, home to the long-haul carrier Emirates.
As carriers recover from worldwide groundings during the pandemic, industry leaders said there are several costs likely to push ticket prices higher.
Here’s what to know:
What’s causing higher airfare prices?
Experts said one factor is worldwide inflation, an ongoing problem since the pandemic started.
Jet fuel costs, roughly a third of all airline expenses, also remain high.
Meanwhile, a global push for the aviation industry to decarbonize has more carriers fighting for the little amount of so-called sustainable aviation fuel, or SAF, available in the market.
"The airlines will continue to do everything they can to keep costs in control as much as possible for the benefit of consumers," said Willie Walsh, the director-general of the International Air Transport Association, an industry-trade group, told the Associated Press.
"But I think it’s unrealistic to expect that airlines can continue to absorb all of the costs. ... It's not something we like to do, but it's something we have to do," Walsh added.
A pandemic hangover in aircraft production is also pressuring the industry as well, experts say. Carriers now keep older planes that burn more fuel flying longer. There also aren't enough new aircraft to expand routes and increase supply to bring down overall prices.
Airline revenue expected to reach nearly $1 trillion globally in 2024
The warning comes as the IATA estimates that airline revenue globally will reach nearly $1 trillion in 2024, which is a record high.
There will be 4.96 billion travelers on airplanes this year, with total expenses for carriers reaching $936 billion — another record high.
But industry profits also are expected to be nearly $60 billion this year.
In particular, Emirates, a main driver for Dubai's economy, saw record profits of $4.7 billion in 2023 off revenues of $33 billion.
The Emirates’ results track with those for its base, Dubai International Airport. The world’s busiest airport for international travelers had 86.9 million passengers last year, surpassing numbers for 2019 just before the coronavirus pandemic grounded global aviation.
The airport now plans to move to the city-state’s second, sprawling airfield in its southern desert reaches in the next 10 years in a project worth nearly $35 billion.
Tim Clark, the airline's president, acknowledged that on Monday by saying that he didn't want people to "get boxes of tissues out and play the violins" when warning that the industry's profit margins sit in the low single digits.
However, Clark contended that as airlines have grown larger and carriers consolidated, cost savings have quietly been passed onto consumers now able to book flights across the world.
"It is quite amazing that ticket prices are where they are today," Clark said. "I think the value-for-money proposition that the consumers have had the benefit from for many decades is something that is one of those hidden bits of the narrative."
Yvonne Manzi Makolo, the CEO of RwandAir, also highlighted the taxes and fees imposed on carriers by the countries they operate in. She specifically cited those paid by carriers flying out of African nations as "already ridiculous."
The Associated Press contributed to this report.