One of the biggest influences on the cost of airplane tickets is the volatility of jet fuel prices. The International Air Transport Association (IATA) reports that in June of last year, the price of jet fuel hit a record high of $172 a barrel.
Prices teetered higher at the start of this year even though they gradually dropped throughout the rest of last year. The price of airline tickets will rise as a result, given that the cost of jet fuel accounts for anywhere from 25% to 30% of any airline’s operating expenses.
While the cost of jet fuel makes up a sizable portion of airline expenses, other factors play a big role in an airline’s quarterly and, eventually, annual profit or loss. These include persistent labor shortages, high labor costs, disturbances in the supply chain, and delays in the delivery of aircraft.
Additionally, despite the fact that demand for air travel is still quite high, there is not enough available capacity to accommodate passenger demand. The majority of the time, it’s just market forces at action, as airlines continue to encounter severe operational difficulties that drive up costs and raise ticket prices.
The issue of the overall increase in inflation is the last one. Airline ticket costs have only recently started to catch up with the average inflation rate, despite the fact that it may not seem like it given how quickly jet fuel prices reacted and increased last year, according to IATA.
Accordingly, the rise in the price of plane tickets has only recently been faster than the rate of global inflation, matching the rate at the start of this year. That the inflation rate is progressively rising also indicates that the cost of plane tickets will rise at the same rate.
