Flight Prices May Rise, Aviation Industry Warns

 Factors contributing to a likely rise in ticket prices, an aviation body warns


Ticket prices are going to rise, due to a series of factors that are adding significant costs to airline businesses, according to IATA, speaking at their annual conference.

Higher Jet fuel costs, which represent a third of all airline expenses, and a switch to a sustainable aviation fuel (SAF) are adding significant costs that are eating into their profit margins.

Total expenses for airlines is =$936 billion for this year, according to AP News. It is these costs that are hitting airlines’ profit margins, with revenue expected to reach $1 trillion this year, driven in part by the high passenger numbers, clocking in at 4.96 billion. Overall, the industry is expected to generate a profit of $60 billion this year.

“The airlines will continue to do everything they can to keep to costs in control as much as possible for the benefit of consumers”, said Willie Walsh, Director-General of IATA, speaking to AP News.

“But I think it’s unrealistic to expect that airlines can continue to absorb all of the costs… It’s not something we like to do, but it’s something we have to do”, he added.

Other airlines announced their profits during the conference. Emirates achieved a $4.7 billion  profit in 2023, driven by a revenue of $33 billion. Analysts point out that a key factor behind these good numbers is the 88.9 million passengers recorded at Dubai International Airport last year, surpassing 2019’s figures.


 

Post Date: 07/06/2024

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