Airfares Higher in APAC and Middle East
Despite international air traffic rebounding, with seat capacity expected to surpass pre-pandemic levels by the end of the year, airfares in many markets remained more than 10% higher in several markets, the Airports Council International (ACI) said.
The airfare study, undertaken by Airports Council International Asia-Pacific & Middle East (ACI APAC & MID), in partnership with Flare Aviation Consulting, examined airfare trends across approximately 60,000 routes in 19 countries from 2019 to 2024, providing a detailed view of post-pandemic air travel recovery in the region.
The study showed that there was a sharp rise in domestic airfares during the first half of 2024 compared to 2019 levels. Notable increases were seen in key domestic markets such as India (+43%), Vietnam (+63%), Malaysia (+36%), Thailand (+26%), and Australia (+21%), all of which heavily rely on domestic air travel.
Despite the anticipated recovery in international seat supply in these countries, airfares remain elevated compared to pre-pandemic levels, the study said.
Coming to the international airfares, they rose 16% in India and Vietnam, 21% in Malaysia, 14% in Australia and 7% in Thailand, with low-cost carriers (LCCs) contributing to the sharpest increases. The study also noted that LCCs in the Asia-Pacific region have demonstrated greater resilience to the COVID-19 pandemic, increasing their market share and bargaining power, further influencing airfare trends.
Airfares in Middle East
In the Middle East, traffic volumes have surpassed pre-pandemic levels in most countries by Q2 of 2024. Countries such as Bahrain (+24%), Qatar (+27%), Saudi Arabia (+30%), and the UAE (+39%) have experienced robust traffic growth. However, despite this recovery, international airfares in some countries remain elevated. In the UAE, fares increased by 22%, while Oman saw a rise of 10%.
Emmanuel Menanteau, President of ACI Asia-Pacific & Middle East and Regional Director, VINCI Airports, said that affordable airfares is crucial not only for ensuring accessibility to air travel but also for supporting the economic vitality of our communities.
He also said that excessive fare increases can discourage passengers, hinder connectivity, and ultimately impact the growth of the sector. It is critical to keep air travel within reach for all, allowing the airports and local economies to thrive together.
Significant Hike
Director General of ACI Asia-Pacific & Middle East Stefano Baronci said that while passenger numbers in Asia-Pacific were returning to pre-pandemic levels this year, many travellers were paying significantly more, especially on domestic routes.
“This indicates that the demand for air travel is likely higher than in 2019. We must ensure that rising airfares do not become a barrier for potential customers. Passengers deserve transparency about these costs,” he said.
He explained that airfares result from a complex pricing system set by airlines, influenced by demand and supply, price elasticity, competition on any given route. For example, routes that are reliant on a single airline saw fare increases of over 25%, while those with steady competition experienced only about a 10% rise.
According to him, it was important to note that the increase in airfares was not related to airport charges. Considering the airlines’ cost structure, fuel prices and inflation have a much greater impact than airport charges.
“For a long time, airport charges have represented a stable component of airlines’ operating costs, averaging around 4%. From 2019 to 2024, airport charges have decreased by 7% for domestic flights and increased by only 6% for international flights, making their influence on the recent spike in airfares in the region negligible,” Baronci added.
