Explainer: Why are plane tickets so expensive?
Have you recently found yourself making an Excel spreadsheet of flights prices for a summer holiday, or trying to strategise how to book flights for that international trip like it was a game of chess? If you have, that’s because flying has become more and more expensive over the past year.
The owner of British Airways, IAG, just reported bumper profits. Its operating profit before exceptional items for the second quarter of the year was more than four times that of last year – rising from around £250m (€295m) last year to around £1.06bn (€1.25bn) this year.
IAG is not alone. Budget airlines easyJet and Ryanair also recently reported record profits, with Ryanair announcing in July it had made a profit four times higher than the previous year in the three months to the end of June.
Airlines make huge amounts of money because tickets are so expensive, and tickets are so expensive because we are often willing to pay more than what we would like to get on a flight – especially when there is no travel alternative. To go from the US to anywhere in Europe, for example, it is now common to pay $1,000 for a round trip on the cheapest seats.
There are reasons beyond profiteering driving the price of tickets up. Inflation is making everything, including flying, more expensive. The price of oil is still high, and since the pandemic there have been staffing shortages that airlines haven’t been fully able to resolve.
There are also fewer planes than there should be, because Boeing and Airbus have had to delay their big plans for new aircraft because of supply chain problems.
But ultimately, it boils down to the fact that airlines exist in a monopoly-like world. They can keep pushing prices up and cutting services because the breaking point for clients is much more stretched than with any other service. We all remember the good old times when you didn’t have to pay for literally everything you bring onboard; now you do, and we still fly.
This week, Chancellor Jeremy Hunt invited companies making massive profits to be responsible in how they treat their customers, talking of a “social contract” between those who provide the service and those who acquire it. He was talking to banking and energy giants, but airlines might be better off listening too.
They’re unlikely to push prices down, however. They might try to save face by saying they’re investing in technology and sustainability – see green fuel – and that it requires money. But if you’re hoping to fly a little further for a little less next summer, you might have to reconsider your hopes.