Airlines Push Airfares to Recover Pandemic Losses

Passengers will be facing steep price hikes as airlines navigate post-pandemic challenges, consultant warns.

Airlines are currently imposing what JLS Consulting’s John Strickland describes as “quite stunning level of pricing,” resulting in a challenging affordability landscape for consumers.

“In my whole career, I have never seen airlines flying really, really, full flights and getting high prices as well. We are getting the best of both, which brings challenges in terms of affordability for consumers.”, Strickland told.

Speaking at Abta’s Aviation Forum, Strickland highlighted the industry’s shift towards profitability following the tumultuous years of the pandemic. He explained that 2023 was a record-breaking year in terms of demand and profitability for airlines, and this momentum has carried over into 2024, whilst explaining that the strong demand combined with limited capacity has created a situation where airlines are able to command high fares.

The supply chain disruptions in the aviation industry have also contributed to the surge in airfares. Strickland highlighted issues with aircraft deliveries, particularly Boeing’s 727 Max and the delayed new versions of the 777. This, coupled with problems related to Pratt & Witney engines has led to over 350 aircrafts being grounded this year.

He added that British Airways has not yet returned to its 2019 capacity levels, mainly due to the replacement of 30 Boeing 747s with smaller aircrafts. However, the airline, along with its counterparts, is capitalizing on the surge in premium leisure travel, a segment that has seen a notable increase since the pandemic.

“It depends on baby boomers that have health, money and time. I thought it was a flash in the pan, but it’s become so pervasive,” he said.

Despite the positive shift, there are challenges such as “massively increased flying times” and higher fuel costs for routes that circumvent areas like Ukreaine and the Middle East. Nevertheless, Strickland emphasized the industry’s positive outlook for 2023/2024