To cope with rapidly rising fuel costs, Michael O'Leary, the chief executive of Ryanair, has decided to increase its airfares.
According to Benedict Bradley, a Thematic Analyst at GlobalData, budget airlines such as the Irish ultra low-cost carrier itself have enabled more and more people to travel abroad. However, the rising ticket prices alongside the current cost-of-living crisis and those already struggling could be priced out of the travel market, leading to a considerable drop in foreign travel.
Although the price increase may be relatively insignificant for some, others will have to rethink their holiday plans in the coming years as people pinch pennies to pay off sky-rocketing energy bills.
GlobalData's forecast suggests that international travel numbers in the United Kingdom will surpass pre-COVID levels by 2024, but rising ticket prices jeopardise this. In GlobalData's Q2 2022 consumer survey, 66 percent of UK respondents confessed that they were either extremely or slightly concerned about the blow of inflation on their household budget. Travel may very well be the first thing to go to ease these cost-of-living issues.
A dramatic increase in fuel costs is the key driver of rising ticket fares, added Keir Maclean, a Thematic Analyst at GlobalData.
"Since the beginning of 2022, the price of jet fuel has risen by 90 percent. Ryanair is the first budget airline to declare the end of super low-cost flights publicly. However, fuel price inflation is not exclusive to Ryanair. It will drive up overhead costs across the industry, negatively impacting not just Ryanair but competitors such as EasyJet and Wizz Air. This is not good news for holidaymakers."
“As shorter, city breaks become less affordable, we may see a shift towards families choosing to take fewer, longer trips to reduce their overall expenditure on flights.”
