Brace for Turbulence: Airfares Forecast to Stay Sky-High in 2024

After turbulence rocked the aviation industry over the past several years, air travelers should brace for the new normal of lofty airfares extending into 2024 and beyond according to industry projections.

Between surging fuel prices, inflation, supply chain disruptions and airlines’ green transition investments, the intersecting factors look to keep ticket costs up in the flight levels. The International Air Transport Association (IATA), which represents nearly 300 global air carriers, cautioned consumers to expect fares tracking elevated operational expenses. Jet fuel accounts for up to a quarter of an airline’s operating costs, meaning volatile oil markets directly impact ticket pricing.

“Consumers can expect ticket prices to continue to track the rising cost of jet fuel, with airfares reflecting the impact of higher oil prices,” said IATA’s Willie Walsh. Regional tensions further rattling jet fuel costs coupled with growing global demand could exert more pricing pressure. Business travel’s robust return is combining with swelling passenger volumes to strain capacity.

Yet the urgency around reducing the airline industry’s environmental impact may prove the biggest culprit for keeping fares aloft. Airlines are aggressively blending costlier sustainable aviation fuel alongside investing in carbon-cutting fleet upgrades to meet ambitious emissions targets. These sustainability initiatives ultimately lead to passengers footing higher ticket prices. According to United CEO Scott Kirby, fares may spike around 50% over several years to cover biofuel’s four-to-five times higher cost over standard jet fuel.

With families budgeting travel plans, the forecast keeps airfares hovering at altitude into the new year. Barring any major economic shocks grounding discretionary flying, analysts expect smooth skies for airlines to recoup investments while travelers endure some budget bumps.