Airline ticket prices have constantly attracted media attention in recent years. Most headlines emphasized that prices seem to be soaring.
CNN reported in February that some airfares were up as much as 50% from a year earlier. That report was based on a data analysis by travel website Hopper, which found that international airfares, particularly to Asia, were about 50% more expensive compared to February 2018. The survey also showed that airfares to Europe were about 15% more expensive than a year earlier.
However, only 4% more was paid for airline tickets in the U.S. in February 2023 compared to the previous year.
Even though they may be frightening, according to a recent analysis from the International Air Transport Association (IATA), airline ticket prices are not quite as high as people believe.
“There has been much media coverage of the perceived acceleration in air ticket prices compared to the general rise in consumer price inflation (CPI),” begins the IATA report, “it is clear that airing ticket prices have only just caught up with the average inflation rate” in countries that are part of the Organization for Economic Development and Cooperation (OECD).
According to the research, prices “remain significantly below the inflation seen in jet fuel prices.”
According to IATA, the cost of jet fuel accounts for between 25 and 30 percent of an airline’s operating costs, which is a difficult reality given the ever-increasing price of fuel.
According to IATA, airlines also struggled with supply chain disruptions, delayed aircraft deliveries, a shortage of flight attendants, and inflated labor costs that were exacerbated by capacity constraints. And as a result of all this, ticket prices began to rise even more.
Add to these variables the pent-up demand from tourists as entry restrictions around the world rapidly disappear, and you can finally see that the cost of airline tickets has “only recently” begun to outpace overall inflation worldwide, according to IATA.
The most important conclusion from the IATA study is that, despite how it may have seemed to all of us, prices only went back to pre-pandemic levels, at least initially. We may have forgotten what prices were like in 2019 because we all got used to the rock-bottom prices that characterized previous years when the airline industry virtually collapsed.