Air fares up 32% since pandemic

Air fares are up one-third on pre-pandemic charges as demand for travel continues to outstrip supply, one European industry group calculates.

A continued resurgence in travel combined with a squeeze on aircraft numbers has pushed up the cost of flying this year.

Airports Council International (ACI) Europe said on Tuesday that the cost of air travel had ballooned.

The industry organisation calculated that “the air fares charged by airlines have increased by 32 per cent compared to pre-pandemic prices”.

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ACI complained that airlines’ ticket prices have risen much faster than European airport charges, which increased just 7 per cent over the same period, according to its estimates.

Air fares were widely expected to rise this summer as many airlines are flying fewer aircraft than before the pandemic, while manufacturers are not meeting orders for new planes fast enough.

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At the same time, demand for travel is growing across Europe, with increased numbers of US tourists (lured by the weaker euro) and Chinese travellers (recently released from lockdowns) adding to the pressure.

Late last year, Michael O’Leary, chief executive of Ryanair Holdings, predicted that air fares would increase across Europe this summer as airlines responded to these factors and to volatile fuel prices.

Many European airlines continue to operate with less capacity than in 2019, the year before Covid hit travel.

However, Ryanair has increased the number of aircraft in its fleet this year and, in 2022, while Aer Lingus owner, International Airlines Group (IAG), expected to operate at 98 per cent of its 2019 capacity in 2023.

Last month IAG chief executive Luis Gallego said bookings across the group were strong and particularly good for leisure travel.

Around the same time, Air France-KLM and German carrier Lufthansa reported that forward bookings were robust.

ACI chief executive Olivier Jankovec told the organisation’s congress in Barcelona, Spain, on Tuesday that full-service airlines were retrenching and consolidating, while low-cost carriers were expanding “relentlessly but selectively”.

He warned that while increases in airport charges have not kept pace with air fares, their utility bills were as much as 78 per cent higher than before Covid, supplies were up 62 per cent and finance costs had risen 22 per cent on the back of interest rate hikes.

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Liabilities remain “€47 billion above pre-pandemic levels” as airports benefited less from state aid during the crisis than did many airlines.

He pointed out that airports now planned to cut investment to €18.4 billion from €34.6 billion over the next two years.

“The investment crunch is not for tomorrow, it is already a reality,” Mr Jankovec added.

He argued that airports’ current situation was not sustainable. “Regulators and governments need to accept the fact that cost pressure and investment needs require an upward adjustment of airport charges,” he declared.

Dublin Airport operator DAA is challenging a Commission for Aviation Regulation (CAR) ruling that Dublin Airport limit increases in passenger charges to a maximum of €11.73 per person by 2026, on the grounds that it will leave the company short of cash for critical improvements.