If you’ve checked fares on flights lately, you may be surprised at how expensive air travel has become. Delta CEO Ed Bastian told attendees at an industry conference last week that airfares are 30% more than pre-pandemic fares.
An article in Bloomberg lays down five causes for the sticker shock.:
1) Airlines reduced their fleets during pandemic lockdowns and are “cautious about bringing back all their idled jets.”
2) Jet fuel has gotten a lot more expensive. “Spot jet fuel prices in New York have soared more than 80% this year,” and the airlines are passing along the extra cost to their passengers.
3) People are willing to shell out extra money for the high-priced tickets. “Some consumers are tapping dormant holiday budgets and upgrading to more expensive aircraft cabins for leisure trips.”
4) Airlines fired “hundreds of thousands of pilots, flight attendants, ground handlers and other aviation workers” during the pandemic and now they are having a hard time re-staffing.
5) After losing $200 billion during the pandemic, the airlines are eager to “repair balance sheets” by jacking up prices.
Will prices ever return to pre-pandemic levels? Bloomberg asked Stephen Tracy, chief operating officer at Milieu Insight, a Singapore-based consumer insight and analytics firm. He said, “The rise in prices is a short-term phenomenon. Let’s all just hope that once these things equalize again, the prices come back down. I am fairly confident that they will.”