Bloomberg — After more than a year of exorbitant airline ticket prices as a result of the Covid-19 crisis, There is good news for travelers this summer, especially those traveling in economy class: Fares are not expected to increase and, if anything, they may be relaxed.
This has been stated by many of the airline CEOs gathered this week in Dubai for the annual meeting of the IATA (International Air Transport Association). Some of them mentioned the case of Great Britain, where demand appears particularly weak.
Fares will be moderated at least in economy class, CEOs sayAirfares in tourist class are good news, but not for those who travel in business class, a segment in which price increases are expected.(Photographer: Leonhard Simon/Get/Leonhard Simon)
The elections to be held soon in Europe They could also reduce people’s desire to spend on travel, they say, as uncertainty about the economy affects consumer confidence.
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“In Great Britain, specifically in economy class, we are seeing a little less strong demand, but a solid summer overall,” said the CEO of Virgin Atlantic Airways Ltd., Shai Weiss. “This tells us that there is a differentiation of perspectives for individuals.”
Michael O’Leary, of Ryanair Holdings Plc, was one of the first to do sound the alarm about softening of rates last month, predicting that they would remain stable in the summer even with the shortage of planes, defying the accepted wisdom that lack of supply always means higher prices.
The CEO of United Airlines Holdings Inc (UAL)., Scott Kirband, on Monday, described the current outlook as “stable,” with demand maintaining but not increasing, while the president of Emirates, Tim Clark, He said that despite strong demand heading into the summer, prices are “very balanced.”
The Director General of IATA, Willie Walsh He said the possibility of political change in Europe was one reason why people might be less inclined to travel. The United Kingdom goes to the polls on July 4 and the European Parliament holds its elections in the coming days.
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“With economy class fares I’ve heard several CEOs say that the prices are a little softer, especially in the leisure market,” Walsh said. “It’s interesting, when I think back to my time as a CEO, this was often influenced by elections.” Walsh oversaw the merger of British Airways and Iberia that formed IAG in 2011.
Data from aviation consultancy Cirium supports the trend, with ayes European domestic rates stable since last summer. The Transatlantic fares have fallen as more airlines have entered the lucrative market.
Cirium says that as more capacity returns, rates will likely drop.
“Airlines work so closely on understanding how others on the route are charging, almost every hour,” said Cirium CEO, Jeremy Bowen. “With the increase in capacity, if an airline opens on a route it will probably deflate prices.”
A cabin that you are not expected to enjoy more reasonable rates is the class business (executive). According to Amex GBT, prices will continue to rise, one of the factors being limitations in aircraft production.
Amex GBT anticipates that business class fares from New York to Los Angeles could increase by 8.5% during the summer period, or from May to August inclusive, compared to 2023, while fares from London to New York could rise by 11.5% taking into account the rebound in summer travel and the possible “halo effect” of the Paris Olympic Games.
Read more at Bloomberg.com
