"Lower Airfare Prices, Please" Airport Criticizes Airlines

"Excessive Price Increases, Impact on the Industry"

An airport directly criticized an airline.

According to the aviation industry on the 25th, the International Air Transport Association (ACI) Asia-Pacific (APAC) Regional Board recently issued a statement saying, "Airlines are imposing excessive airfares, slowing down the industry's recovery speed." This is a criticism of airlines not restoring high airfares to reasonable prices even after the COVID-19 pandemic has passed.

Photo by Jinhyung Kang aymsdream@

The board also disclosed the results of a survey of 3,600 routes in the top 10 markets in the APAC region, providing exact figures. According to this survey, international fares increased by up to 50%, while domestic fares showed an increase of less than 10%. The rate of increase in international airfares was significantly higher.

The board stated, "Airport usage fees have remained the same since the pandemic, but major airlines' airfares have soared beyond pre-pandemic levels, generating substantial profits."

The market with the highest airfare increase was India, which rose by a staggering 40.9%. This was followed by the United Arab Emirates (UAE) at 33.5%, Singapore at 29.5%, and Australia at 22.6%. In the Korean market, fares increased by 4.8%, ranking seventh among the 10 countries surveyed.

Countries with smaller fare increases than Korea were Japan (3.7%), Indonesia (1.6%), and China (0.6%). The survey compared fares from the fourth quarter of 2019 to those of the fourth quarter of 2022.

The board also acknowledged that "fuel costs rose by 76% in 2022 compared to 2019, and the consumer price index increased by an average of 10% during the same period, increasing airlines' cost burdens," recognizing that fuel and labor cost increases influenced airfare hikes.

However, even considering these factors, the board viewed the increase as excessive. Stefano Baronci, Secretary General of ACI Asia-Pacific, said, "Excessive airfares can negatively impact long-term demand for air travel and harm the industry. Airlines should be cautious in pricing decisions to protect consumer interests." This is a warning that airfare hikes could again cause contraction in the industry.

The reason airports reacted sharply to airfares is widely believed to be due to airport operators' continued deficits not only during COVID-19 but also afterward. Airports recorded losses throughout the pandemic, and the switch to profitability after reopening remains uncertain. The board emphasized, "Despite not sparing investments such as internal remodeling and runway improvements during COVID-19, airport usage fees have been frozen. Airlines are using consumers' pent-up travel demand to recoup losses."