Airport fees have remained constant since the pandemic, although airfares in important regions in Asia-Pacific and the Middle East have rapidly increased. According to a study on regional airfare trends done by Airports Council International Asia-Pacific and Flare Aviation Consulting, the country with the highest increase in airfare was India (41 per cent), followed by the United Arab Emirates (34 per cent), Singapore (30 per cent), and Australia (23 per cent).
In several of these markets, including India, Indonesia, Saudi Arabia, South Korea, and Japan, the study revealed that domestic airfares continued to rise in the first quarter of 2023 while only slightly declining on international routes.
In order to boost earnings and make up for losses sustained during the epidemic, according to ACI Asia-Pacific, airlines are taking advantage of low competition and pent-up demand, while airports continue to offer improved facilities to travellers despite incurring significant operating and capital costs.
Despite having made substantial expenditures in capital growth and technology, airports at the height of the epidemic froze or cut airport costs, including as landing, parking, and passenger fees, and offered incentives, it added.
“These excessive airfares threaten the industry’s long-term recovery and may have a far-reaching influence on the associated industry by reducing demand for air travel and increasing the financial burden on the already stressed sector,” said Stefano Baronci, Director General of ACI Asia-Pacific.
Baronci suggested airlines should exercise fair pricing that supports recovery and safeguards consumers’ interests.
“A supply-demand imbalance should not be exploited by airlines at the expense of customers by restricting the capacity, especially international one which is a key driver of social and economic growth and a major source of revenues for the airport sector. We urge airlines to carefully consider the long-term impacts of their pricing decisions. At the same time, governments must consider liberalising markets through policies such as open skies, which will allow competition while keeping airfares under control.”
Fuel prices and inflation are responsible for a significant portion of airfare increase. Fuel prices went up 76 per cent in 2022 compared to 2019. The airlines’ costs increased as the retail inflation saw an average 10 per cent increase over the same period.
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