After the pandemic, airfares skyrocketed in many regions around the world. In particular, fares in the Asia-Pacific region increased the most, increasing by more than 33% over the same period in 2019. They increased by 17% and 12% in North America and Europe, respectively.
The problem arises when North American and European countries have already relaxed border restrictions, but many Asian countries such as China and Japan have just reopened recently. The aviation industry of these countries has been strongly hit and is now in the recovery phase, so ticket prices are high.
According to Trip.com, in China only, despite increasing airfares, the high demand boosted revenue from domestic tourism during the May Day holiday up by 101% compared to before the pandemic, with about 274 million trips. Outbound travel also hit the highest in three years, with flight bookings soaring by nearly 900% compared to the same period last year.
Although the demand for air travel is high, the supply is facing many difficulties because of the shortage of labor resources. Many airlines are cutting staff like unskilled workers and pilots. The closure of Russian airspace and rising fuel prices also contributed to the sharp increase in fares.
Many major airlines have not been able to operate at full capacity due to supply chain bottlenecks. Sanctions related to Russia also make it difficult for Airbus, Boeing and suppliers to find materials for manufacturing, causing high prices.
Low-cost airlines have yet to reopen their existing flight routes. At the same time, Alitalia, Air Namibia, Flybe, and 61 other airlines went bankrupt during the epidemic.
In this situation, airfares are forecasted to increase continuously until 2024.