The relations between airlines and airports are rarely at their best. So, while the airline association IATA was celebrating the return to juicy profits, its airport equivalent, the ACI, lamented the rise in air fares. Particularly in Asia.
According to an ACI Asia-Pacific study on air fare trends in the region, ticket prices have risen above pre-pandemic levels and are hampering the recovery of the aviation industry.
The study, carried out in collaboration with Flare Aviation Consulting, examined approximately 36,000 routes in the ten main aviation markets in Asia-Pacific. And it draws a damning balance sheet for passengers.
Soaring international tariffs
It reveals a an alarming increase in international air fares of up to 50 %. This compares with an increase of less than 10 % on domestic routes. The markets with the highest growth air fares are India (41 %), the Korea (39%), China (35%) and the United Arab Emirates (34 %). However, this is not the end of the story, Singapore (30 %), Indonesia (27%) and Australia (23 %) are also concerned.
Even domestic traffic shows signs of heating up. Unexpectedly, the ACI notes that in the first quarter of 2023, domestic fares continued to rise, particularly in India, Indonesia, the United States and Japan. Saudi Arabiain South Korea and Japan.
The study found thathe airlines are benefiting from strong latent demand and little competition. This ensures that they make a profit and recoup the losses incurred during the pandemic.
There are countless examples of "holes" in Asia's air cover. For example, Palembang - the second largest city in Sumatra, Indonesia, with a population of 1.7 million - no longer has any international flights. It is often regional airports that suffer from a lack of international air services. Fukuoka and Nagoya in Japan, for example, have lost their European routes.
According to consultant OAG's figures for the week of 12 June, international seat capacity to and from North-East Asia was 40.9% lower than in the same week of 2019. In South-East Asia, the figure was -23.81TP3Q. On domestic routes, South-East Asia remains down on 2019, at -13.9%.
Are airlines holding back the recovery in Asia?
Stefano Baronci, Managing Director of ACI Asia-Pacificsays it is concerned about high prices. " Excessive air fares threaten the sector's long-term recovery and can have a significant impact on the associated industry by reducing demand for air travel. It increases the financial burden on an already struggling sector. Airlines must charge fair prices that support the recovery and protect consumer interests. An imbalance between supply and demand must not be exploited by airlines to the detriment of customers by limiting capacity, particularly international capacity. It is an essential driver of social and economic growth and a major source of revenue for the airport sector." .
And to be more threatening. " We urge airlines to carefully consider the long-term impact of their pricing decisions.. At the same time, governments should consider liberalising markets through policies such as open skies, which will allow competition while keeping air fares under control" added Stefano Baronci.
The IFA certainly understands that inflation and fuel prices are two factors in the rise. But both phenomena are having less influence this year with the fall in oil prices...
