Air travel: jet fuel prices fall, but flight tickets remain expensive

Whilst the fall in jet fuel prices has not yet been reflected in ticket prices, seasonal factors continue to push fares upwards. Demand is being driven primarily by European and Mediterranean destinations, which are considered more stable from a geopolitical perspective.

This is according to the Observatory run by Maiora Solutions, a company specialising in the analysis of airfares, which monitored over a thousand flights and 30 routes from Italia to Europe, the Middle East and Asia to assess the combined impact of the summer season and the international situation on prices.

“The results show two very clear trends,” notes Andrea Torassa, co-founder of Maiora Solutions. Prices continue to rise week after week, and those who have waited until now to book are paying up to 21 per cent more than those who bought their tickets in March. Furthermore, August costs on average 74 per cent more than June on Mediterranean routes.”

The increase, however, is not uniform. Destinations with higher tourist demand, such as Athens, are seeing the sharpest price rises, whilst seaside resorts such as Palma de Mallorca are managing to keep prices down thanks to a greater availability of charter and low-cost flights.

The Rome–Athens route is a case in point: the average price in June rose from 104 to 173 euros in just one week (+66%), indicating particularly strong demand. During the same period, however, fares on routes to Heraklion, Dubrovnik and Palma de Mallorca fell, suggesting that supply is still sufficient to meet demand.

The biggest seasonal price rise is on the Milan–Heraklion route, which goes from 121 euros in June to 323 euros in August, a rise of 168 per cent.

The Observatory also highlights a similar trend on the main routes to European capitals, where the rise in prices was the most pronounced across the entire sample.

Those who booked a flight in early May for July paid, on average, 28 per cent more than those who had booked in March. For flights in August, the average price increase was 23 per cent.

The departure airport also makes a difference. In August, a Milan–London flight costs an average of 329 euros, which is 42 per cent more than the 231 euros charged for the Rome–London route. The Milan–Paris route is also, on average, 21 per cent more expensive than the route from Rome.

The difference is mainly due to the greater demand at Milan’s airports, particularly Linate, whilst Fiumicino benefits from more stable competition amongst airlines, especially low-cost carriers.

Finally, among the routes monitored, the Milan–Madrid route stands out, with the average price rising from 113 euros in June to 225 euros in August – almost double.

The analysis confirms that the time of booking continues to have a significant impact on the final ticket price.

Those who booked a European flight in early May for July spent, on average, 21 per cent more than those who had booked the same route in March.

On the Milan–Paris route, for example, the price rose from 121 to 170 euros over a two-month period. Overall, between March and June, the average price of European flights for August rose by 10 per cent.

Whilst in Europe prices are determined primarily by seasonality, on routes to the Middle East the impact of geopolitical tensions continues to prevail.

In May, demand in the region fell by 28.4 per cent and, as the conflict in the Gulf escalated, fares rose by 57 per cent over the course of a week. Prices have since fallen back somewhat, but remain around 5% higher than March levels.

The most expensive routes for August are London Heathrow–Amman (661 euros) and London Heathrow–Doha (666 euros), both in Economy class.

For those travelling on to Asia via the Gulf hubs, costs remain the highest in the entire sample: the average price is 782 euros in Economy and 2,360 euros in Business, with prices peaking at over 3,200 euros on the London Heathrow–Singapore route.

Unlike European routes, however, long-haul flights show greater stability over time. For these destinations, July is actually more expensive than August (848 versus 813 euros), a trend typical of intercontinental flights, where booking well in advance remains the most effective strategy for keeping costs down.

In the United States, demand for flights remains strong despite rising ticket prices, buoyed in part by travel linked to the World Cup and the celebrations marking the 250th anniversary of the country’s founding.

For the rest of the summer, fares are broadly in line with last year’s. The exception is flights between the United States and London, where return fares are 27 per cent higher.

If demand were to slow down after the summer season, prices might start to fall. Recent tensions in the energy market, however, suggest that a return to previous price levels seems, at least in the short term, unlikely.