Air fares to moderate this year, says transport chief

IATA director general Willie Walsh said the chance of political change in Europe was one reason people may be less inclined to travel. Picture: Amr Alfiky/Reuters

After more than a year of eye-watering airfares post-Covid, there is some good news for flyers this summer, at least for those travelling in economy — prices are not expected to go any higher and in fact, may moderate.

That was the assessment of many airline chief executives gathered in Dubai this week for the International Air Transport Association (Iata) annual meeting. 

Several singled out Britain as one place where demand is looking particularly weak.

Upcoming elections around Europe may also be suppressing people’s desire to spend on travel, they said, as economic uncertainties weigh on consumer sentiment.

“In the UK, specifically in economy class, we’re seeing a bit less robust demand but a strong summer overall,” Virgin Atlantic Airways CEO Shai Weiss said. 

“That tells us there’s a bifurcation of prospects for individuals.” 

Ryanair’s Michael O’Leary was one of the first to sound the alarm about softer fares last month, predicting they would hold steady into summer even with aircraft in short supply, challenging the accepted wisdom that a lack of supply always means higher prices.

United Airlines CEO Scott Kirby described the picture right now as “steady as she goes” with demand holding but not increasing, while Emirates president Tim Clark said despite strong demand going into summer, prices are “very much at an equilibrium.” 

Iata director general Willie Walsh said the chance of political change in Europe was one reason people may be less inclined to travel.

“With economy class fares I’ve heard a number of CEOs say pricing is a bit softer, particularly in the leisure market,” said Mr Walsh. 

“It’s interesting, when I think back to my time as a CEO, this was often influenced by elections.” 

Mr Walsh oversaw the merger of British Airways and Iberia that formed IAG in 2011.

Data from aviation consultancy Cirium backs up the trend, with European domestic fares steady since last summer. 

Transatlantic fares have fallen as more carriers have entered the lucrative market.

Cirium said that as more capacity comes back, fares will likely fall.

One cabin that is not expected to enjoy more reasonable fares is business class. 

According to Amex GBT, prices will continue to rise, with aircraft production constraints one factor.

Amex GBT expects New York to Los Angeles business class fares could increase by 8.5% over the summer period, or May to August inclusive, versus 2023, while London to New York business class fares may rise by 11.5% factoring in the summer travel spike.

Meanwhile, Ryanair traffic jumped 11% in May to 18.9m passengers.

• Bloomberg