Why are airfares now so High?

ethernet

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SYD-LAX one way $2000-$5000 economy - not first. London, anywhere else 3-4 times what I remember low season to be. And its just not flights to Australia but also USA east to west. Absolutely sky high as we approach 4th July. Now two weeks ago, things appeared normal. Some would say supply-demand, but I am talking from last week. Things get crazy on CNY and Xmas, July school holidays even, but it is still sky high in August. Does anyone know the reason? I am hoping the plane will be half empty. I am aware of the Ukraine situation, and note Emirates to London is a bargain, relative to anything USA at the moment.

Just checked again and August is reasonable to cheap, so just the instant blowtorch on July prices that are an eyeopener.
 
Last edited:

levelnine

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It's been well reported that Qantas' fuel contracts are coming to an end this month and they are now significantly increasing fares to offset the fact that they have to buy fuel at much higher prices.


 

ethernet

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Any way to determine how many pax on each plane taking off over the next week? As for AJ, I think the German idea to use 380's is smart. As for fuel, Air freight is presently highly profitable. I am thinking the cause is not enough staff back online yet, too many sickies. So you schedule for fewer flight attendants, meaning fewer bums on seats, to meet the ratio formula.
 

burmans

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Yes, it is supply and demand. Airlines laid a lot of people off, many found good jobs elsewhere and the airlines are struggling to ramp back up. Fuel prices don’t help but resourcing is the biggest problem.
 

ANstar

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Flights are full. The only fare classes left for sale will be the higher ones. Just looking on expert flyer and most things are zero in all classes on most airlines. I'd say the traditional "low' season will not be low for a while as people travel after 2 years of not being able to.
 
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As others have said, demand is high, and supply is lowish. Losses have been huge, and airlines need to make up those. The market now allows full-pricing as opposed to previous cut-throat deals.

Add in the two massive factors of soaring fuel prices and (probably) double-digit inflation because people still don't seem to understand the effects of printing non-existent money, and you have the perfect storm.

I bought my syd-lhr ticket for $7.5k, and two months later it would have been $9k. Economy tickets apparently increased by a similar amount in that time too.
 

jb747

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Any way to determine how many pax on each plane taking off over the next week? As for AJ, I think the German idea to use 380's is smart. As for fuel, Air freight is presently highly profitable. I am thinking the cause is not enough staff back online yet, too many sickies. So you schedule for fewer flight attendants, meaning fewer bums on seats, to meet the ratio formula.
How on earth do you work out that the issue is sickies. Fares are months in advance, so these are ‘predictive’ sickies perhaps.

The airlines simply do not have the resources that they used to have. Aircraft are still in storage, and it will take years to get them out. Guess what, the maintenance people who are needed to make that transition from storage to in use are also in short supply. You’ve got pilots who need extensive training before being usable, and a huge hole in the staffing numbers left by people who may not have found better jobs, but who did find jobs in which they don’t feel the companies will stab them in the back at the first opportunity.

And, during covid, many CEOs took the opportunity to ‘right-size’ their companies, getting rid of as many staff (and aircraft) as they could. In many cases this was intentional, and permanent. The glut of capacity that led to the cheap airfares is gone, perhaps permanently, but certainly for quite some time.
 

SeatBackForward

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The industry I work is similar. Project comes to an end lay off everyone, three months later they pick up another project, mad rush to resource up again...when no doubt they could've put those three months training, or finding other work for those staff to do without the cost of ramping up and down ..
 

ethernet

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Absolutely you can predict sickies or unscheduled leave. The science is presently called Predictive analytics - Wikipedia. But in 1970 Walmart was running data cubes, and stuff now called AI. Airlines are operational - many moving pieces, and my other favorite OP or Operations research - Wikipedia. For fares, some of the dumber airlines trust the revenue maximization engine, only they fail to use all available inputs. Worse, they don't audit or cost mistakes, or listen to old hands screaming 'lead time'. The really rich use PA all the time - especially share speculation and futures.

Management should be numerically literate, but they are not, and chose to ignore bad news - not enough doctors, not enough teachers. The new mantra is other peoples problems, not on my written performance criteria. Or can we not do this - See Origin Energy and automated hardship - seeing if they can outdo Robodebt. Or QF and lost baggage - kick that one to the curb.

Covid is difficult, but the UK has a world class predictive model, as does Denmark. Maybe you overheard a colleague about maxxing out their sick leave to get more overtime - work the system and all that. Recruitment shops care about beating hearts, not work ethic, and are never punished for placing job hoppers. Say 'Mechanical issues' when you really mean not enough bums on seats, or one flight attendant called in sick meant the whole flight was cancelled.

Plus 35 days, fares are about normal, even knowing oil avgas is dearer. We all know airports are an understaffed zoo, with throw a dart automated check in games. Being needed badly - helps your job security. I need to second source plane pax numbers, to work out if seat reduction numbers, drove that revenue engine crazy. We observed 30-40K one way fares during covid, and I have a hunch that the revenue engines are sill defective, never fixed.

If that is complicated, HR's job is to make sure employees never see these numbers, else the might try on for a pay rise. If it was me, I would be issusing 'bonus payments' for those employees making a critical difference.





How on earth do you work out that the issue is sickies. Fares are months in advance, so these are ‘predictive’ sickies perhaps.

The airlines simply do not have the resources that they used to have. Aircraft are still in storage, and it will take years to get them out. Guess what, the maintenance people who are needed to make that transition from storage to in use are also in short supply. You’ve got pilots who need extensive training before being usable, and a huge hole in the staffing numbers left by people who may not have found better jobs, but who did find jobs in which they don’t feel the companies will stab them in the back at the first opportunity.

And, during covid, many CEOs took the opportunity to ‘right-size’ their companies, getting rid of as many staff (and aircraft) as they could. In many cases this was intentional, and permanent. The glut of capacity that led to the cheap airfares is gone, perhaps permanently, but certainly for quite some time.
 

AviationNZ

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Absolutely you can predict sickies or unscheduled leave. The science is presently called Predictive analytics - Wikipedia. But in 1970 Walmart was running data cubes, and stuff now called AI. Airlines are operational - many moving pieces, and my other favorite OP or Operations research - Wikipedia. For fares, some of the dumber airlines trust the revenue maximization engine, only they fail to use all available inputs. Worse, they don't audit or cost mistakes, or listen to old hands screaming 'lead time'. The really rich use PA all the time - especially share speculation and futures.

Management should be numerically literate, but they are not, and chose to ignore bad news - not enough doctors, not enough teachers. The new mantra is other peoples problems, not on my written performance criteria. Or can we not do this - See Origin Energy and automated hardship - seeing if they can outdo Robodebt. Or QF and lost baggage - kick that one to the curb.

Covid is difficult, but the UK has a world class predictive model, as does Denmark. Maybe you overheard a colleague about maxxing out their sick leave to get more overtime - work the system and all that. Recruitment shops care about beating hearts, not work ethic, and are never punished for placing job hoppers. Say 'Mechanical issues' when you really mean not enough bums on seats, or one flight attendant called in sick meant the whole flight was cancelled.

Plus 35 days, fares are about normal, even knowing oil avgas is dearer. We all know airports are an understaffed zoo, with throw a dart automated check in games. Being needed badly - helps your job security. I need to second source plane pax numbers, to work out if seat reduction numbers, drove that revenue engine crazy. We observed 30-40K one way fares during covid, and I have a hunch that the revenue engines are sill defective, never fixed.

If that is complicated, HR's job is to make sure employees never see these numbers, else the might try on for a pay rise. If it was me, I would be issusing 'bonus payments' for those employees making a critical difference.
This all sounds a little conspiracy theorist... As others have said, two main reasons;
  1. Supply and demand
  2. Fuel price is very high
You can put to bed your idea that they're reducing seat numbers due to sickness, load factors are extrememly high for many routes.
 

RooFlyer

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This all sounds a little conspiracy theorist... As others have said, two main reasons;
  1. Supply and demand
  2. Fuel price is very high
You can put to bed your idea that they're reducing seat numbers due to sickness, load factors are extrememly high for many routes.
Which came first Ii wonder? Cutting of services or high load factors?
 

jakeseven7

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SYD-LAX one way $2000-$5000 economy - not first. London, anywhere else 3-4 times what I remember low season to be. And its just not flights to Australia but also USA east to west. Absolutely sky high as we approach 4th July. Now two weeks ago, things appeared normal. Some would say supply-demand, but I am talking from last week. Things get crazy on CNY and Xmas, July school holidays even, but it is still sky high in August. Does anyone know the reason? I am hoping the plane will be half empty. I am aware of the Ukraine situation, and note Emirates to London is a bargain, relative to anything USA at the moment.

Just checked again and August is reasonable to cheap, so just the instant blowtorch on July prices that are an eyeopener.

Because everyone is travelling right now, everywhere like its the big new thing. I've never seen so many people flying / planning / talking about travel. It is incredible.
 

ANstar

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Because everyone is travelling right now, everywhere like its the big new thing. I've never seen so many people flying / planning / talking about travel. It is incredible.
I'm just back from a trip and so many honeymooners that got married last year and can only travel now as well as all the VFR trafifc... demand is extremely high right now.
 

offshore171

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Because everyone is travelling right now, everywhere like its the big new thing. I've never seen so many people flying / planning / talking about travel. It is incredible.

There's a LOT of pent up demand from the last 2 years. Eg: people who haven't seen relatives/friends abroad since 2019, or just those who are way overdue for a holiday.

Add to this that capacity is still ramping up. There's a lot of A380's still in storage. And there's a lot of aviation workers who permanently left the industry during covid and found alternate employment. This has created a skills shortage.

And of course the oil price has gone off the charts.

Put all that together and the only surprise is that fares aren't even higher...
 

ethernet

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I am aware of pent up demand and oil prices. Offsetting that, is wastefulness, trying NOT to lower the number of scheduled flights - bilateral agreements and all that. Go midweek, and before a major religious holiday (Eid al-Adha) and another one. It looks like the booking engines failed to detect long haul pilgrimages and religious holidays are at lows.

Just did a search, and fares to USA are normal'ish again and cheaper than what I paid. At one point it was $6000 one way to PDX - if I wanted before 4th July. Sanity has returned, now about 1K. This was not last minute booking but a week or more ahead. When I said 4 times the going rate - I meant it. I also had my American FF'er kayak it from over there. So there were about 5 days of serious anomalies. I also observe via Asia flights results returned, but still not competitive - at least on the usual search engines.

I see Virgin Australia flights way way out of line - some multiple of United. Yep, they just don't know it. MH did not appear in my results as a via Malaysia option

Now flights are cheap - almost as if a try-on failed, and they now have to dump unsold seats. Good for .au, because I cancelled some plans - meaning I spend a lot less and come home early. I have a no change fee ticket, but its too late now.

Aff'ers missed one issue. Interest rates on plane leases should rise in line with Fed increases. That will bite - but with 12 countries running out of forex, more planes will get repossessed. Plus they took a bit of a hit on Russian leases.
 

Ade

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Interesting article about Lufthansa “hate selling” tickets intentionally

 

JohnK

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It's been a while since I've travelled overseas December/January. It's now July and think I've missed the boat.

BNE-CNX return fly out the day after school holidays start and return the day before school starts in January.

The best I can find is ~$1450 return.

And I've also searched flying out a couple of days before Christmas and returning same time and that prices at ~$1600.

No award availability which is no surprise.

I'm guessing it will be a busy holiday season with travel starting to open up again.

Will be interesting to see if this trend continues next year.
 

downgraded

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It's been a while since I've travelled overseas December/January. It's now July and think I've missed the boat.

BNE-CNX return fly out the day after school holidays start and return the day before school starts in January.

The best I can find is ~$1450 return.

And I've also searched flying out a couple of days before Christmas and returning same time and that prices at ~$1600.

No award availability which is no surprise.

I'm guessing it will be a busy holiday season with travel starting to open up again.

Will be interesting to see if this trend continues next year.
Did you try leaving on Christmas Day? A bargain is often to be had then.
 

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