Airline bosses explain reasons for rising cost of plane tickets

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Leaders in the aviation industry have warned that flight prices are expected to rise as airlines grapple with various costs stemming from the worldwide grounding due to the coronavirus pandemic

Among these costs, soaring global inflation and expensive jet fuel rates add to the conundrum. The recent push for the aviation industry to go green has led to a fierce competition for sustainable aviation fuel (SAF), which is sparingly available in the market.

The International Air Transport Association (IATA) conveyed this information during their annual meeting held in Dubai. Willie Walsh, IATA's director-general stated: "The airlines will continue to do everything they can to keep costs in control as much as possible for the benefit of consumers. 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."

Further complications arise from aircraft production delays caused by the pandemic. Older planes that consume more fuel are being used longer than anticipated due to the lack of new aircraft supply to cater for route expansion and to decrease overall prices, reports Wales Online.

Nevertheless, despite these challenges, the IATA anticipates a record-high revenue of almost one trillion dollars (£784 billion) for the global airline sector by 2024.

The aviation industry is set to see a staggering 4.96 billion passengers this year, with airlines' expenses soaring to a record 936 billion dollars (£734 billion). Profits are also expected to hit nearly 60 billion dollars (£47 billion).

Emirates, a key player in Dubai's economy, reported a record profit of 4.7 billion dollars (£3.68 billion) in 2023, with revenues reaching 33 billion dollars (£25.8 billion). These figures are in line with the performance of Dubai International Airport, the world's busiest for international travel, which saw 86.9 million passengers last year, topping pre-pandemic levels.

Plans are underway to transition operations to Dubai's second major airport within the next decade, an initiative estimated at nearly 35 billion dollars (£27.4 billion). Tim Clark, President of Emirates, made a veiled reference to the tight profit margins in the industry, urging people not to "get boxes of tissues out and play the violins".

Despite these challenges, he argued that the growth and consolidation of airlines have resulted in cost savings that have been passed on to consumers, who now enjoy the ability to book flights across the globe.

"It is quite amazing that ticket prices are where they are today," Mr 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 chief executive 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".