Air expert: “The rise in ticket prices will continue”
The average cost of air tickets in economy class in the first quarter of 2024 increased by a quarter. This follows from Rosstat data. Meanwhile, prices differed depending on the region. For example, a flight from the Komi Republic (in all directions) on average increased in price by 42% to 14 thousand 663 rubles. Economy class is the most popular transportation segment. How rising prices affect the flow of tourists and how prices for air tickets will change in 2024 — MK talks about this. said the executive director of the agency «AviaPort» Oleg Panteleev.
— Fares in economy class on lines within Russia have increased. “This happened for obvious market reasons,” the expert said. “Airlines have the opportunity to increase fares until they are faced with elasticity of demand, when passengers are willing to pay increasingly higher prices.
< /p>
— Absolutely right. After all what happened? On the one hand, carriers are indeed faced with rising costs. For most expenses they are forced to pay more and more. This applies to fuel, aircraft maintenance, and staff salaries. But, on the other hand, there was one very important item on which some airlines saved money last year. These are issues related to the restructuring of interaction with Western leasing companies. An insurance settlement was carried out on the aircraft, and the current debt obligations on these aircraft are lower than when they were leased to Western companies. But this same situation played a cruel joke on the market. Airlines have the opportunity to get rid of double registration of aircraft and use them on international routes. Accordingly, those aircraft that were previously, figuratively speaking, locked in the Russian market and provided excess supply, can now be sent to where they can earn money. There is no longer any excess supply on the domestic market. Accordingly, airlines are now simply skimming the cream. They load their flights very well. During the low season, a number of airlines have occupancy rates exceeding 80% or more. Moreover, ten years ago, two thirds of occupied seats in the low season was considered a very good result.
— Airlines understand that the market is ready to buy tickets at the current, fairly high prices, and maybe even higher. Carriers' costs have increased significantly. Raising tariffs allows them to avoid losses. But it cannot be said that companies are extremely fattening.
— The growth in purchasing power that we observed in 2023 in relation to air travel was associated with an increase in passenger traffic. Why? In many industries, employee incomes have increased: sometimes by tens of percent, sometimes by multiples. This has enabled people to fly more actively to their holiday destinations. But the inflation we saw last year continues today. Rising prices for products and services eat up income. Those surpluses that could be spent on travel in 2023 will be spent on a food basket in 2024. We cannot say that carriers will not find the ceiling of consumer capacity. The situation we observed in February-March is indicative. In February, there was a record rate of increase in the cost of air tickets, and in March, airlines faced a decrease in the growth rate of air travel and held sales. It is quite possible that in March they were already approaching this ceiling of consumer capabilities. On the other hand, carriers' pricing is quite flexible and applies specifically to each flight. If they see that sales are going down somewhere, they will stimulate the consumer with the ruble.
— There is long-term observation that prices rise until about August. This is a seasonal phenomenon. After August, prices will begin to decline slightly. As for the month of this year compared to the same month last year, there are many uncertainties. I believe that price increases will continue. Most likely, it will be in double digits, more than 10%. But there is speculation that airlines will begin to feel that they have reached a point where demand is responsive to price. But will they somehow systematically reduce prices? No, you shouldn't expect this. Until our airlines' carrying capacity increases, there are no prerequisites for prices to decrease.