More expensive fuel, more expensive tickets – inevitable changes on the aviation market
According to the announcement of Michael O'Leary, the head of Ryanair, next year the average air ticket price may increase by as much as 14-16 percent. “More expensive oil, more expensive fuel, more expensive tickets” – this is how the largest low-cost carrier in Europe sums up the current market situation. Experts have no illusions that this trend will affect not only Ryanair, but the entire aviation industry.
As Jakub Kluziński from the Sobieski Institute explains in the online Radio RMF24:
"The price of jet fuel today is almost twice as high as it was before the outbreak of the war with Iran at the beginning of this year, and so far there are no signs that this price will significantly decrease in the near future."
Fuel accounts for up to one third of all airline costs, and in the case of low-cost carriers - up to 40 percent. Higher fuel prices must therefore translate into ticket prices.
Will the increases be felt? Comparison with other means of transport
Despite the announced increases, experts reassure us that for the average passenger the differences may be small. Currently, the average Ryanair ticket price is around $50-55. If it increases by 10 percent, it means an increase from approximately PLN 250 to an amount closer to PLN 300.
These differences are still so imperceptible and the prices are so small that - let's even compare it with train ticket prices - it turns out that we can still fly half of Europe by plane for the price of a train ride in Poland - emphasizes Kluziński.
Additional fees – should passengers be worried?
Many travelers wonder whether additional fees, for example for larger luggage, will also increase. The expert reassures:
"I think the potential has already been exhausted. If someone has recently flown with a low-cost airline, they know that we have to pay extra for practically everything. The basic ticket price is usually very low, but if we want to take larger luggage or buy additional services, we have to pay extra for everything."
Airlines may look for additional sources of revenue, but radical changes in the policy of additional fees should not be expected.
The geopolitical situation and fuel prices – is there any hope for improvement?
The expert points out that the current situation on the fuel market is directly related to the conflicts in the Middle East.
"If the situation there calms down enough and there is a long-term perspective for oil production and exports to return to pre-war levels, there is of course a chance that in the long term these prices will return to baseline levels."
However, uncertainty on international markets, as well as the unstable situation in Ukraine and Russia, cause the market to react with price increases.
In our economic world, uncertainty is a big problem because the world is getting used to the new situation and the economy is getting used to it. However, if there is any uncertainty as to whether it will be this way or otherwise, the market and companies immediately add a so-called bonus for this unpredictability - explains Kluziński.
Will purchasing a ticket in advance protect against price increases?
Many passengers wonder whether purchasing a ticket in advance will avoid higher prices. The expert cools hopes:
"There is no simple recipe here that a ticket purchased a few months in advance will be cheaper. The world after Covid has completely turned upside down when it comes to pricing."
The aviation market has become extremely dynamic and unpredictable. Kluziński advises to monitor prices and respond to opportunities:
