Stop The Drop in Air Fares

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We had gotten too used to it. Public pressure, unbridled competition between carriers, tremendous technological advances, the arrival of “low-costs” and the all-too-famous “yield management” have led to an almost constant decline in air fares, especially from the mid-1990s. And we had gotten used to it to such an extent that it was impossible to imagine the prices that passengers paid in the 1970s, which saw the appearance of mass transport with the arrival of very large aircraft. Well, those days are over, at least for a number of years.

Of course, manufacturers will continue their efforts to provide even more efficient devices, engine manufacturers are developing even more economical and less noisy machines, but all this comes at a price. Politicians in a hurry to give ecological guarantees to their voters are continuing their pressure on airlines by forcing them to become even quieter, and above all, to land at large airports without being detected. In other words, they are willing to use air transport on the condition that it does not harm the behaviour of the populations living near airports, and that the environmental lobbies have nothing to complain about, all the while demanding ever more competitive fares and even better services.

However, geopolitics is an essential component of air transport and sometimes, as is the case now, it creates a particularly delicate environment. The first effect of the current Gulf conflict has been a massive increase in the cost of oil and gas. While the price of a barrel had been stabilised at around $70 for at least a year, it has soared sharply since the beginning of the conflict in the Middle East and the closure of the Strait of Hormuz, to quote $112.66 at the time of writing. And airlines felt obliged to put the famous fuel surcharges back into circulation. And they didn’t go down without a fight. I have in mind the case of a long-haul company whose starting price is around €750 and which has added a fuel surcharge of €550, i.e. 73% of the promotional rate on which it relies to attract consumers. It is not the only one, and most operators do the same, even if not in the same proportions.

And I wonder why carriers, who are perfectly capable of adjusting their rates by the minute, choose the fuel surcharge method to charge for an inevitable increase in their cost price. It would be more honest, let’s say the word, to display the new price directly rather than maintaining the promotional hooks. It’s still taking consumers for fools. This practice is all the more curious because most carriers scream before they hurt. The largest of them practice “hedging”, which consists of protecting themselves from hazards by buying their fuel well in advance. Air France/KLM has covered its oil needs for the first half of 2026 at 87%, and Lufthansa is doing the same at 76%. That is to say, these companies do not feel the increase in the price of a barrel of oil while they make their passengers bear it, while camouflaging this increase in a fuel surcharge, thinking that consumers will accept this approach.

We can clearly see the strategy of operators who are afraid to display the true selling price, which would cause them to lose valuable positions in price comparison sites that essentially display call rates. However, customers will still have a little trouble admitting that, from a displayed price that could suit them, they end up having to pay an amount much higher than the advertised price.

I understand very well that airlines, whose economic balance is very fragile and whose profits are less than 10% of their turnover, unlike many other sectors of activity which gravitate above 20%, are very sensitive to anything that could cause their cost price to vary. It should be remembered that the price of fuel normally represents around 20% of turnover with oil at 70 dollars per barrel, but that it can easily exceed 30% in the event of a sudden and lasting sharp increase.

It remains to be seen whether the current conflict will last, in which case the carriers will have been right to familiarise their customers with this increase. If not, let’s hope that the operators will fight to be the first to stop these fuel surcharges while explaining that the time of continuous price reductions is over, at least for a long time.

Bad Times for Air Transport

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It seems that the planets are no longer aligned in front of air transport. The latter had raised its head following the COVID disaster, which, it should be remembered, had brought down this entire sector of activity and from which it was not thought that it would recover for about ten years. The opposite happened. Within a year, traffic flows had been restored, and revenue had risen again, driven by a sharp increase in fares that was well accepted by passengers. And then, little by little, the situation deteriorated for multiple causes, each of which could be manageable but whose accumulation leads to a certain gloom.

The first and most important, for the moment, is the conflict in the Middle East, the negative consequences of which are immediate: an increase in the flight time between Europe and Asia and a sudden increase in the price of a barrel, which had stabilized at around $70 and which has risen to around $100 with peaks of nearly $120. This operational and financial difficulty comes on top of the consequences of the conflict between Russia and Ukraine, which has dragged on since February 2022 without any end in sight, despite the many announcements of negotiations that have led to nothing. The embargo decreed against Russia by the so-called Western countries has resulted in a ban on overflights of this country which, it should be remembered, is by far the largest on the planet. So carriers from countries associated with the embargo are subject to detours that cost them several hours of flights on their routes between Europe and Asia, which is not the case for, for example, Chinese airlines.

But geopolitics is not the only one to blame for the prevailing gloom. Many countries are affected by repeated strikes for a wide variety of reasons. This is the case in Germany, a country renowned for the quality of its social dialogue. Now it is plagued by repeated conflicts. They reached the heart of the aviation activity with the work stoppages of Lufthansa’s flight crews: 800 flights cancelled on 12 February, then those of the PNT (flight crew, i.e. pilots) on 12 and 13 March. And that’s not all, the strikes have also severely affected airports, including those in Frankfurt and Berlin. The situation is no better in Belgium. All departures from Brussels airport, for example, were cancelled on 12 March. So what is happening in such a prestigious sector of activity that employees are showing such dissatisfaction?

And that’s not all. The situation in the United States has become very complex for some time. It began in 2025 when the failure of Washington’s air traffic control led to the collision between a military helicopter and an American Airlines aircraft that killed 67 people. In November of the same year, following a loss of an engine, an MD 11F of the giant UPS crashed in Louisville, resulting in the death of the 3 crew members but also 10 people on the ground. And recently, on March 22, an Air Canada aircraft from the Canadian operator Jazz Aviation collided with a fire truck that was crossing the runways, following an error in air traffic control at New York’s La Guardia airport. This has a negative impact, especially since a disagreement over the funding of the Department of Homeland Security between the House of Representatives and the Senate has resulted in border control officers no longer being paid, which leads to significant disruption for international flights.

Other incidents and accidents also tarnish the beautiful image of air transport. India is particularly affected. The crash of Air India Flight 171 on June 12, which everything suggests was due to a voluntary act by the pilot, even if the final report has not yet been published, caused 260 deaths. This proves that there is still a fragility in this activity, which is so controlled and which has made so much technical progress, and that is the behaviour of the pilots. The crash of the Germanwings flight in France, the mysterious disappearance of flight MH 370 and the crash of the Air India flight demonstrate this. And we don’t yet know how to settle this delicate issue. I also note that the situation is not all rosy in India, if I am to believe the somewhat surprising resignation of the director of Indigo, Pieter Elbers, who had made it one of the most important carriers on the planet in a short time.

We could also point to the failure of the software of the Airbus 320, damaged by solar radiation. All the aircraft concerned had to be grounded as a matter of urgency. However, even if not all versions were affected, 12,257 Airbus 320 series had been delivered in September 2025. Small causes, big effects.

It is time for air travel to get rid of these negative aspects. It will need a lot of optimism to face the challenges that await it.