It has been 6 years since COVID-19 took place – however, flight ticket prices remain sky high. In the pandemic of 2020, it was calculated that the airline industry had lost more than $370 billion in revenue, with airports and air navigation services losing around $130 billion in revenue. Yet, this financial deficit is not only due to the lack of demand for air tickets but was also due to lack of supply of seats. During lockdown, it was said 795,000 flights were cancelled. Considering the number of empty seats on planes when flights were reinstated, this puts a massive loss on the travel industry. How long will it take for the recovery of the industry to recoup those losses?

In the years of 2020-2022, the airline industry made a profit of negative $181.6 billion, calculated to take around 5 years to recover, according to research analysts. However, the airline industry itself announced a full recovery in 2024, as the number of passengers reached a peak of 9.5 billion, compared to 4.5 billion in 2019, with a net profit of $37.7 billion. Yet, the question of higher pricing remains. Since 2019, flight tickets have increased by 20.3%, and while industries have used inflation as a major reason for this increase due to input costs, this does not account for the whole picture. After COVID, many were thrilled with the idea of frequent travel returning, and suppressed demand that got released caused an increase in the quantity demanded of plane tickets. However the supply of flights decreased, mainly due to production delays, as plane manufacturers were instantly flooded with a large order of planes, maintenance, parts shortages, supply chain bottle necks etc. and an increase of the price of complementary goods and services, such as the price of jet fuel increased by 82% ( partly due to the Ukraine war from 2022). This excess demand of plane tickets, and shortage of supply of planes, caused the price of a flight tickets to rise, until less people were able and willing to purchase a flight ticket. However, this is not the only reason.

Airlines took advantage of this newfound Demand from people who never flew earlier now wanting to fly due to the Lockdown revelation. This opportunistic increase in prices by airlines was for their own financial gain, while they blamed the price increase on a simple supply and demand problem. However why have these increased prices stayed the same over the last 3 years? This is because there is still strong demand for the tickets at these prices. People are still willing to pay. People are willing to forget about the surge in prices, making as though it never happened. This is like the reverse of Lockdown where without flying, people feel as though they are locked down, as during the pandemic, many people felt trapped in their houses, feeling as though they were missing out on living their lives and spending time with their families, this ultimately caused them to want to travel as soon and as much as possible, to make up for the lost time. This made and still makes people willing to spend, as the desire to travel outweighs the cost, however this willingness was also a cause of them having a greater disposable income, as there was minimal spending on big purchases, like plane tickets, during covid. Additionally after the pandemic, corporate travel and conferences all over the world quickly bounced back, to make up for the lost time ( and money) as fast as possible, which makes them very willing and able to spend a few extra grand on a flight ticket. On another note, due to wars such as the current situation in the middle east, fuel prices have drastically increased and a number of flights have been cancelled causing airlines having to make up for the lost cost, which further rose the prices of plane tickets. Will the prices ever go down? Although the future cannot be certain, it is very unlikely that flight ticket prices will drop back to what they used to be pre – pandemic, however for some flights where the quantity demanded decreases for reasons such as unpopular destinations, route of travel, or excess supply of seats in a season , airlines may drop the prices to fill up the empty space. Additionally, booking flights months in advance may lead to a softer impact on your bank account, as most people don’t think to plan, as they try to save costs on lodging such as Air BnB, which gives them the incentive to spend more on flight tickets. So, if you are planning on saving money on your travel expenses this year or are just wanting to gain a greater insight into why flights costs a lot more than what they did pre-COVID, I hope this article helps you find what you are looking for when you first clicked on the title.