Why flying is so expensive and likely to remain that way

As consumers are willing to pay more after being denied the chance to travel, airlines try to recoup some of the losses accrued during the pandemic

The worst of the pandemic has subsided, countries are accessible again and airlines expect decent profits now that business and leisure travel has returned. Why, then, are fares still so high?

Key takeaways

• Lack of planes: Airlines idled large portions of their fleets because travel demand was so lackluster during the pandemic that they weren’t needed. Now they can’t bring them back fast enough;
• Consumers are willing to pay more: Even if some trips might be a bit more expensive than they were previously, many people still see value in spending on travel;
• Fuel prices: Although they have cooled in the past year, they are still more than 50% expensive than in January 2019, posing a problem for airlines as fuel is their single-greatest cost;
• Sustainable aviation fuel: The industry is going to have to pay $2 trillion to become carbon neutral by 2050 - airlines will have to raise ticket prices to cope, making flying even more costly;
• China: The world’s second-biggest economy and source of tourism spending is still rebuilding from the crisis, and it will take at least a year for it to get back to pre-pandemic levels of international air travel.

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