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In the mid-2010s, I was working at a company that sparked holiday cheer with “Secret Santa” initiatives for team bonding. The price limit was always a reasonable £10, which usually meant jars of good honey or a pair of socks.
However, one year things kicked up a notch and four of my colleagues received one-way plane tickets to cities including Prague, Paris and Berlin. The donors, although slightly angered that their idea wasn’t as original as they’d imagined, dizzyingly revealed that they’ve secured flights for as little as £5.99. Even if the recipients would have to spend a few pounds to get home.
Fast forward to 2023 and those happy days of flights as stocking fillers are truly over. Indeed, EasyJet recently revealed that its average fares for January-March were up 31% compared to the same period in 2022. The airline’s chief executive, Johan Lundgren, said the increase was due to “massive cost increases, not least the price of jet fuel, though he stressed that passenger demand was “stronger than ever”.
Even Ryanair, the poster child for seats that cost little more than a coffee at the airport, has said the price of summer break tickets will rise again this year, and the prime fare on its flights sales page is £24. .99 relatively expensive (excluding extras).
Chief Executive Michael O’Leary told the Telegraph last month: ‘Last year we saw average fares rise by 20%. There will be a second year of low double-digit price inflation, because there is no capacity.
“I think there is a reasonable outlook this year… [during] average summer airfares will increase again by 10-15%.
Digging a little deeper, it’s clear that some destinations have experienced particularly significant price increases in recent years. Data from aviation analyst OAG shows that flights to Istanbul soared by 69.4% between 2017 and the end of 2022. Meanwhile, trips to enduringly popular destinations like Amsterdam and Rome respectively increased by 31 and 33.3%. period.
Taking a shorter time frame, increasingly trendy Turin saw average flight costs rise by 141.2 per cent from 2021 to the end of last year. And routes to fellow Italian city Pisa turned out to be 78.3% more expensive than a year earlier.
What caused the dramatic price increase?
As O’Leary has suggested, one of the main reasons for rising flight prices is simply supply and demand. Some airlines aren’t yet operating at pre-pandemic levels, but travelers are desperate to get away. Therefore, the seats are sold at a premium price. British Airways capacity, for example, has improved but will still remain at 93% of 2019 levels throughout the year.
The industry is also not immune to cost increases that have infiltrated all areas of life. Crucially, jet fuel prices, which typically account for a third of airline spending, rose a staggering 71% last year. And while this has since leveled off and is now trending downwards, its impact is still being felt.
Will we ever see cheap airfare on the scale we did in the 2000s? A recent nugget of news appears to be working in passengers’ favor. Heathrow was ordered last month to cut its fares, paid by airlines, by 20% from 2024 for two years, from £31.57 per passenger to £25.43 next year.
However, it remains uncertain whether airlines are passing these savings on to travelers, and between inflation, geopolitical instability, climate concerns and rising operating costs, the overall picture is bleak. Furthermore, the conditions simply seem too challenging for new budget game-changers to emerge, say Wizz or Ryanair.
Can you still secure cheap flights?
For those who have yet to book a summer vacation and are eager to find a bargain, all hope is not lost. According to the flight comparison website, Skyscanner, there are still a number of money-saving tricks travelers can try.
Laura Lindsay, Destinations Expert at Skyscanner, says: “The easiest way is to book in advance. More seats available on any route means the balance of supply and demand is in your favour.
Being flexible on dates always helps, and she also suggests setting up price alerts and checking the website’s savings generator for insights into individual destinations.
Doing some research on new flight routes could also reveal cheap prices. “When airlines open up a new route, there’s usually a chance to get a bargain as they use low fares to promote it, but usually you have to be quick as interest stimulates demand, which will affect pricing,” he says. Lindsay.
“Conversely, any well-served and established route is generally cost-effective. For example, any UK to Spain route where many airlines compete for customers usually stays lower for longer as they keep prices low to encourage bookings.
Analyzing further, there are some destinations where flights are actually cheaper than before the pandemic. According to the latest research from Skyscanner, Madeira is 22% cheaper, while Sofia, Bulgaria, an up-and-coming city break location, has seen its prices drop by 18%.
OAG’s data also highlights some destinations with better value for money. Menorca has seen an average price drop of 59.6% over the past five years (until the end of 2022), which could be explained by an increase in flights to the Balearic island, which have increased by more than a third since July 2019 to 2022 .
There are also a number of destinations that have experienced a decline in prices between the end of 2021 and 2022. Popular foodie destinations such as Bilbao and Lyon saw their average prices fall by 61.1 and 55.1% respectively, while a host of Irish cities (including Dublin, Cork and Kerry) recorded declines of more than a third.
Vacations remain a priority, whatever the cost
An interesting element that needs to be considered when looking at the demise of cheap flights is that, despite the cost-of-living crisis, holiday spending is stable or even on the rise. A recent Skyscanner survey suggested that 41% of consumers are planning the same number of holidays in 2023 as the previous year, and a third are even planning to take more trips. Just seven percent plan to spend fewer vacations in 2023. Even more shocking were the findings that 70 percent plan to spend the same, if not more, on travel.
In a bleak landscape where celebrity chefs promote £1 meals and the middle classes opt for hot water bottles instead of heating their homes, the results are startling. EasyJet’s Johan Lundgren suggests the emphasis on experiences explains why demand in the travel industry remains high.
“While there is a squeeze on people’s incomes, people are prioritizing vacations and travel even more than before,” he said. “That’s because people are refocusing on experiences and doing things rather than investing in their homes, perhaps.”
Certainly, the collective trauma of multiple lockdowns and the pandemic can be seen to have prompted a seize-the-day attitude, although whether this will last if economic conditions get even tougher remains to be seen. For now, though, people are determined to go, whatever the cost.
