Tickets fly in the wings of inflation and demand

Dubai: Anwar Daoud

Airline ticket prices are expected to show uneven growth over the next phase, with a combination of many factors, most notably world-proven inflation and its effects on freight and service prices and costs. the increase in the price of fuel, which coincides with the increase in demand for air travel due to holidays and vacations and the facilitation of air travel, restrictions and procedures in travel and the opening of places to international tourism.

Sources in the travel and tourism sector suggested the possibility of registering an increase in air ticket prices during the next phase, explaining that the seasonal movement of travel to different regions will play an important role in increasing ticket prices. of travel in the aviation sector. .

influencing factors

Dr. Haitham Al-Haj Ali, CEO of Dubai Link Tourism, confirmed that there are several factors that affect ticket prices globally, including weather, fuel prices, salaries for flight workers, vacations, holidays and accommodation prices in hotels. , including epidemics and travel bans. Over the past two years, the world has witnessed, including supply and demand, which could push ticket prices to record levels or lead to the cancellation of some previously scheduled airlines.

Al-Hajj Ali said that as it is known, the economy is affected by one or all of these factors and in turn affects the prices of goods and services, which leads to inflation.

Inflation is of two types: short-term inflation that disappears with the disappearance of the influencing factor or long-term inflation that extends even after the disappearance of the influencing factor. Since weather, holidays and epidemics are factors that are not affected by inflation, fuel prices and workers’ wages are affected by inflation, and this is influenced by the reciprocal relationship between inflation and prices of goods and services.

price increase

He continued: The reality of the relationship between inflation and the economy and the prices of goods and services is much deeper and more complex than that, and based on the readings of many experts and by analyzing the data and comparing them with previous years, exists a consensus that ticket prices will witness an increase starting from mid-March 2022 driven by improved weather and increased demand for travel With the month of Ramadan approaching, the increase will continue at unprecedented levels compared to ticket prices in the last three years, with the start of the third quarter of 2022 under the influence of high fuel prices and the start of the Hajj and summer holiday season in many countries in the region, then to keep pace with the expected rise in prices of tickets with the start of the fourth quarter 2022 with the start of the holiday season and the increase in demand for fuel as a result of the start of the winter season. These expectations remain limited by government decisions on the global stage regarding “Covid-19” and any resulting transformation.

By destination and country

For his part, Mamoun Humaidan, Chief Operating Officer and General Manager for the Middle East, North Africa and India in Wego, said that with more countries opening their doors and resuming new flights, and hoping for a vaccine effective for mutated Omicron, expect average airline ticket prices to vary depending on destination and country.

He added: “Through our website and searches from around the world in February this year, we see that the average price of airline tickets will increase by 25% for some destinations and decrease by 15% for others.”

He continued: If we take for example Egypt, the average ticket price in February 2022 was $ 207, a decrease of 4% compared to the same period of 2021. As for Saudi Arabia, the ticket price in February 2022 was about $ 187. , a decrease of 20% compared to the same period of 2021..

He explained: If we look at Britain, we see that the average ticket price increases by 28% in February 2022 compared to the same period of 2021, reaching $ 678. The price of a ticket to Thailand has risen to $ 550, a 45% increase over last year. As for Turkey, the increase was 12% to reach $ 313. Ticket prices to Azerbaijan and Georgia have dropped by about 30% compared to last year.

It is worth noting that many destinations are witnessing a gradual return to the supply of seats, which means pressure on prices due to the effort to increase occupancy.

Humaidan showed that these expectations may change based on the developments the world is experiencing in controlling the Corona pandemic and finding vaccines against the new mutant. We expect demand to increase gradually this year.

Humaidan said: We advise travelers to continue to take precautionary measures and follow the necessary measures during the trip. It is important to plan your trip in advance, especially as this will increase the demand for travel in order to ensure the best price. Advance booking is one of the best solutions to get the most convenient prices. There are also search engines like our site that can be used for the same purpose, which offers passengers a wide range of options to ensure that passengers get the best prices on airline tickets and at the time that suits them.

Inflation is a restraining factor

The ABL Aviation report showed that inflation could lead to significant changes in financial statements, future earnings and overall performance. At the consumer level, aviation will be affected by passengers facing higher air fares and this may reduce demand and facilitate sector recovery. from the epidemic.

fuel prices

The average price of jet fuel rose globally in mid-February 2021 to $ 111.7 a barrel (excluding handling costs), according to the Jet Fuel Price Index, a joint initiative between the International Air Transport Association (IATA) and Platts .

The increase in fuel prices is expected to be reflected in the cost of travel and airline ticket prices during 2022, in case prices remain at current levels or prices continue to rise.

In light of developments in aircraft fuel prices, the total airline fuel bill for 2022 is expected to be affected by an additional $ 68.2 billion, with an average of $ 104.1 per barrel.

Emirates Airlines: We are monitoring developments in fuel prices to reduce their impact

An Emirates spokesman said: “Emirates, like other airlines, has been hit by rising fuel prices. In light of this, we have adjusted prices slightly throughout our network. We are closely monitoring developments in fuel prices, which currently and in the foreseeable future represent the largest component of operating costs, and are working as hard as possible to limit the impact of rising fuel costs. aircraft to our customers. ”

He added: “We will constantly review ticket prices, adapting as needed in line with market dynamics, competitive environment, seasonal effects, resumption of travel demand, customer booking patterns, aircraft fuel prices and factors.” others. “Despite the latest modifications, we are confident that our tariffs are competitive and offer great value, along with our strict health and safety measures, booking flexibility and free COVID-19 insurance coverage to support our customers.”

Leave a Comment