Airline leaders explain why tickets are getting more expensive

The cost of your next flight is likely to rise, according to industry leaders. As carriers recover from groundings around the world due to the coronavirus pandemic, there are several costs that could drive up ticket prices, according to the International Air Transport Association (IATA), which held its annual meeting in Dubai.

Part of the problem stems from global inflation, an ongoing problem since the pandemic began. Jet fuel costs, about a third of all airline expenses, remain high.

Meanwhile, a global push to decarbonize the aviation industry has many carriers scrambling for the small amount of so-called sustainable aviation fuel (SAF) available on the market. IATA Director General Willie Walsh said: “Airlines will continue to do everything they can to keep costs under control as much as possible for the benefit of consumers.

“But I think it’s unrealistic to expect that airlines can continue to absorb all the costs. It’s not something we like to do, but it’s something we have to do.” Adding to the pressure on the industry is a pandemic hangover in aircraft production as well, ATA said.

Carriers now keep older planes that burn more fuel flying longer. There are also not enough new planes to expand routes and increase supply to lower overall prices. The warning comes as IATA predicts that global airline revenue will reach almost a trillion dollars (£784bn) in 2024 – a record high.

There will be 4.96 billion passengers on planes this year, with total spend for carriers reaching $936 billion (£734 billion), another record. But industry profits are also expected to be close to $60bn (£47bn) this year.

Notably, Emirates, a major engine for Dubai’s economy, posted record profits of $4.7bn (£3.68bn) in 2023 on revenues of $33bn (£25.8bn ). Emirates’ results match those for its base, Dubai International Airport. The world’s busiest airport for international travelers had 86.9 million passengers last year, surpassing figures from 2019, just before the coronavirus pandemic grounded global aviation.

The airport now plans to move into the city-state’s second expanded airfield in its southern desert over the next 10 years in a project worth nearly $35bn (£27.4bn). Tim Clark, the airline’s chairman, obliquely acknowledged that on Monday, saying he didn’t want people “pulling out tissue boxes and playing the violin” when he warned that the industry’s profit margins were in the low single digits.

However, he argued that as airlines grew and carriers consolidated, cost savings were quietly passed on to consumers who can now book flights around the world.

“It’s pretty amazing that ticket prices are where they are today,” Mr Clark said. “I think the value proposition that consumers have enjoyed for many decades is something that is one of those hidden parts of the narrative.”

Yvonne Manzi Makolo, the chief executive of RwandAir, also highlighted the taxes and fees imposed on carriers by the countries they operate in. She specifically cited those paid by carriers flying out of African countries as “already ridiculous”.