Hong Kong(CNN) Travelers across the Asia Pacific will likely continue to fork out more than usual for trips this year, even as planes return to the skies at a rate not seen since the start of the pandemic.
Fares within the region were 33% higher in February than in the same month of 2019, compared to increases of 12% and 17% in Europe and North America, respectively, according to data from Skyscanner Travel Insight.
In some cases, customers are paying double what they did four years ago.
A business class ticket from Paris to Shanghai that cost approximately $5,650 in 2019 has now doubled to more than $11,500, according to American Express Global Business Travel (Amex GBT). The company is a travel platform that originated from the eponymous credit card company.
The average price for a business class seat from Singapore to Shanghai also doubled in 2019, Amex GBT said.
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The surge is part of a broader trend. Flight tickets around the world are generally higher than pre-Covid levels for a number of reasons, said Hugh Aitken, vice president of travel at Skyscanner.
But passengers in Asia Pacific now face more price jumps than other regions, highlighting the uneven global recovery.
The problem is not expected to end soon.
Economy fares to Asia from North America and Europe are set to rise 9.5% and 9.8% this year from last year, respectively, Amex GBT forecasts show. The latter is almost double the planned price jump for European economy routes in other geographies. A similar view is expected for the business class cabin.
Road to recovery
Experts say rising costs, labor shortages and the closure of Russian airspace are all driving up prices.
The main constraint, however, is that Asia is still in the early stages of reopening.
Unlike North America and Europe, which have long since relaxed border restrictions, most Asian destinations, such as Japan and South Korea, only reopened for travel in 2022.
Mainland China only lifted quarantine restrictions for international arrivals in January after three years and last week continued to issue visas for all visitors, including tourists.
“In markets where restrictions are the last to be lifted, and therefore [flight] capacity at the end to be restarted, the difference in fares is the highest,” said Aitken. “At the moment, it’s in APAC.”
Passengers bound for Singapore check in at Haikou Airport in China’s Hainan province on March 15.
Even if the demand is there, it won’t be easy for airlines to add service quickly. They often require long hours to pre-position crew and ground staff, coordinate with airports and move the aircraft, said Jeremy Quek, Amex GBT’s chief airline practice line leader. .
“Planning an airplane schedule takes months,” he said.
The numbers show that. Despite China’s reopening, outbound flight capacity is “currently at 15% to 20% of pre-Covid levels,” according to Trip.com (TCOM) CEO Jane Sun.
In an earnings call this month, he said the bottleneck is “significantly limiting the overall pace of China’s outbound travel recovery.”
Meanwhile, flight capacity for long-haul international routes, such as between Europe and Asia, was only 17% of 2019 levels this quarter, according to Amex GBT.
“Even if the airline capacity comes back, it will not come back at the same speed as we expected the demand to be.
“Reduced capacity, and increased demand, is the formula for rising prices.”
Added cost
Last year, Russia sealed off its airspace to airlines from several countries as it began its invasion of Ukraine.
As a result, many flights are forced to reroute, making the flights longer and more expensive. Restrictions remain, and the worst affected is between Asia and North America or Europe.
“For example, a flight from Tokyo to London that now has to go east over the North Pacific, Alaska, Canada, and Greenland would have to add 2.4 hours to the flight time and would likely burn about 5,600 gallons of plus fuel, a 20% increase,” Amex GBT said in a report.
The price of fuel itself has also risen. Alan Joyce, CEO of the Australian flagship carrier Qantas (GET IT)said his company’s fuel bill is 65% higher than in 2019.
“Fares should be higher than before with Covid, because fuel is higher,” he said in a speech this month.
Joyce also said the carrier incurred higher costs, and needed time to retrain crew members who were out of commission during the pandemic.
“Our pilots were driving buses in Sydney and Melbourne for a while because they were stopped. So to get a pilot back, we had to put them through 23 hours of simulator training and five flight sectors,” he explained. .
Impact on consumers
Despite the sticker shock for some travelers, experts do not believe that people will be deterred from traveling, or that the overall recovery of the sector will suffer.
“So far, we see no signs of an impact on consumer confidence and traveler demand. We see continued strong demand on Skyscanner’s platforms for travel in 2023,” said Aitken.
Sun said he expected a recovery in Chinese outbound travel to “increase the pace in the coming quarters” as airlines continue to restore service.
Some airlines are also quick to adapt to a surge in prices by offering attractive discounts.
Qantas and its budget carrier, Jetstar, have announced discounts on more than 1 million seats this year on a mix of domestic and international routes.
Qantas and Jetstar aircraft on the tarmac at Sydney Airport in July 2022. Both carriers have announced a discount on more than 1 million seats this year.
Japan Airlines also tried to mark down tickets for its customers, although its efforts were met with a greater increase in demand than expected.
The carrier’s website crashed earlier this month when it tried to launch a campaign for discounted domestic flights.
“Our system was unable to handle the traffic,” the company said in a statement.
A Japan Airlines plane, pictured with Mount Fuji in the background at Tokyo’s Haneda Airport in February.
Prices do not increase on every route. Aitken said consumers should “still be able to find competitive prices on flights, especially if they can change when and where they go.”
Fares from the United Kingdom to Vietnam, or the United States to Malaysia, for example, are both slightly lower for bookings later this year, compared to a year ago, he added.
“In the current climate, the most straightforward way for travelers to find good deals is to book early,” advises Aitken.
