Flying is likely to remain expensive

According to a study, the increasing demand for travel after the corona pandemic is giving airlines wings again. According to a survey by Allianz Trade, airlines are back in the black due to higher prices for plane tickets and simultaneously falling operating costs thanks to lower kerosene prices. “After three years of heavy losses, the aviation industry could return to profitability in 2023 – that’s earlier than expected,” explained Milo Bogaerts, head of Allianz Trade in Germany, Austria and Switzerland, on Monday when the study was presented. “However, the lack of capacity remains the bottleneck.” That should slow down the flight of the airlines for the time being. “For consumers, this also means that flying is likely to remain expensive.”

The German AUA parent Lufthansa is aiming for an operating profit above the level of the pre-crisis quarter of 2019 for the spring quarter that has just ended. “We are facing the summer with the highest sales in our company’s history,” said Lufthansa CEO Carsten Spohr at the beginning of May. Because ticket sales are currently around a quarter higher than in 2019, the year before the outbreak of the corona crisis. The capacity offered will still be below the pre-crisis level, with high utilization of the aircraft.

High demand despite high prices

According to a study by Allianz Trade, passenger demand is increasing despite the high prices. In the first quarter of 2023, passenger-kilometres sold worldwide rose by a good 58 percent within a year and reached almost 86 percent of the level before the pandemic.

The increase in Asia was particularly strong as part of the reopening of China after the corona lockdowns with plus 125.5 percent. “Europeans are also taking off more and more,” explained Maria Latorre, industry expert at Allianz Trade. “The holiday season is upon us and consumers are getting back on the plane after the pandemic and energy crisis.”

Global airline ticket sales this summer (May-September 2023) grew 35.2 percent year-on-year to reach 92 percent of 2019 levels, with North American sales already at 99 percent, it said. At the same time, flight prices have risen, especially for international routes such as those between the USA and Europe – by 23 percent on an annual average.