Phnom Penh, Cambodia. 04 November 2024. The topic of rising airfare trends was one of the focal points of discussions among airport leaders during the Board Meeting of the Airports Council International Asia-Pacific & Middle East (ACI APAC & MID), hosted by Cambodia Airports, in Phnom Penh.
The airfare study, undertaken by ACI APAC & MID, in partnership with Flare Aviation Consulting, examined airfare trends across approximately 60,000 routes in 19 countries from 2019 to 2024, providing a detailed view of post-pandemic air travel recovery in the region.
While international air traffic is rebounding, with seat capacity expected to surpass pre-pandemic levels by the end of the year, airfares remain more than 10% higher in several markets. Several markets experienced significant airfare increases. The study showed a sharp rise in domestic airfares during the first half of 2024 compared to 2019 levels. Notable increases were seen in key domestic markets such as India (+43%), Vietnam (+63%), Malaysia (+36%), Thailand (+26%), and Australia (+21%), all of which heavily rely on domestic air travel.
Despite the anticipated recovery in international seat supply in these countries, airfares remain elevated compared to pre-pandemic levels. In India and Vietnam, international fares rose by 16%, Malaysia by 21%, Australia by 14%, and Thailand by 7%, with low-cost carriers (LCCs) contributing to the sharpest increases.
The study also notes that LCCs in the Asia-Pacific region have demonstrated greater resilience to the COVID-19 pandemic, increasing their market share and bargaining power, further influencing airfare trends. In the Middle East, traffic volumes have surpassed pre-pandemic levels in most countries by Q2 2024. Countries such as Bahrain (+24%), Qatar (+27%), Saudi Arabia (+30%), and the United Arab Emirates (+39%) have experienced robust traffic growth. However, despite this recovery, international airfares in some countries remain elevated. In the UAE, fares increased by 22%, while Oman saw a rise of 10%.
Stefano Baronci, Director General, ACI Asia-Pacific & Middle East, said: “While passenger numbers in Asia-Pacific are returning to pre-pandemic levels this year, many travelers are paying significantly more, especially on domestic routes. This indicates that the demand for air travel is likely higher than in 2019. We must ensure that rising airfares do not become a barrier for potential customers. Passengers deserve transparency about these costs. Airfares result from a complex pricing system set by airlines, influenced by demand and supply, price elasticity, competition on any given route. For example, routes that are reliant on a single airline saw fare increases of over 25%, while those with steady competition experienced only about a 10% rise.”
“It is important to note that the increase in airfares is not related to airport charges. Considering the airlines’ cost structure, fuel prices and inflation have a much greater impact than airport charges. For a long time, airport charges have represented a stable component of airlines’ operating costs, averaging around 4%. From 2019 to 2024, airport charges have decreased by 7% for domestic flights and increased by only 6% for international flights, making their influence on the recent spike in airfares in the region negligible,” Baronci added.
Commenting on the study, Emmanuel Menanteau, President of ACI Asia-Pacific & Middle East and Regional Director, VINCI Airports, said: “Affordable airfares is crucial not only for ensuring accessibility to air travel but also for supporting the economic vitality of our communities. Excessive fare increases can discourage passengers, hinder connectivity, and ultimately impact the growth of our sector. It is critical to keep air travel within reach for all, allowing our airports and local economies to thrive together.”
