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Tag: airfares

  • Direct Asia-Pacific Airfares Return to 18% Premium over Middle East Routes

    Direct Asia-Pacific Airfares Return to 18% Premium over Middle East Routes

    Airfares from the Asia-Pacific region to the West remain elevated due to the persisting conflict in the Middle East, according to a report by Airports Council International Asia-Pacific & Middle East.

    Direct flights from Asia-Pacific to the West have returned to an 18 per cent pricing premium over routes with a stopover in the Middle East, matching the baseline recorded across 2025, according to the ASEAN Airports Economic Impact Study released on Oct 7.

    The study analysed the top 100 passenger routes connecting Asia-Pacific countries to the West. Following the outbreak of conflict on Feb 28, direct airfares were around 30 per cent more expensive in March and almost 50 per cent higher in April, before direct flights became cheaper than stopovers in May and June, said director-general Stefano Baronci.

    Gulf Transit Capacity Recovers Unevenly

    Middle Eastern transit hubs bore the immediate brunt of route diversions and safety restrictions. Eleven major airports across the region operated just 66 per cent of their scheduled flight volumes between March and August. While operational capacity at those hubs climbed back above 80 per cent in August, scheduled seat availability remains tight as carriers reroute flights around sensitive airspace corridors.

    Earlier industry projections pencilled in a normalisation of Asia-West ticket pricing from September 2026 based on assumptions that Gulf hubs would restore full capacity. Those expectations have run straight into operational caution from international airlines.

    “Both direct flights bypassing the Middle East and flights via the Middle East continue to be higher than what they were in 2025, and this will continue to be the case.”

    Regional carriers continue to trim their exposure. Singapore Airlines and its low-cost unit Scoot extended flight cancellations on routes between Singapore and the Middle East through December. Cathay Pacific suspended all flights into the Middle East until late January 2027. American and European carriers have made similar adjustments, eliminating marginal frequencies to conserve fleet hours and manage fuel burn over lengthened detour paths.

    Jet Fuel Swings Lock In Higher Base Fares

    Jet fuel volatility has compounded the pricing pressure for international carriers. Global jet fuel prices surged immediately after hostilities began before dropping toward wartime lows of $2.70 a gallon on the Argus U.S. Jet Fuel Index in June. That price break proved temporary. By Sept 17, the index climbed back to $4.53 a gallon and held near $4.30 a gallon in early October, nearly double the average level logged across 2025.

    Airlines cannot adjust fares instantly when fuel costs spike. Major carriers price forward inventory three to six months ahead, meaning ticket sales locked in during summer were flown against higher autumn operating costs. To protect operating margins, carriers have raised baggage fees, increased surcharges and pulled back capacity on thinner routes rather than discounting unsold seats.

    For corporate travel managers and consumers across Asia, elevated fares mean business travel budgets will stretch over fewer total trips into 2027. High fares also shift leisure passenger volumes toward intra-Asian destinations where regional capacity remains stable and direct routing avoids West Asian airspace.

    Changi Generates 42 Per Cent of ASEAN Aviation GDP

    The ACI study also detailed the direct economic footprint of airport infrastructure across Southeast Asia, where Singapore maintains an outsized lead over regional peers. Singapore Changi Airport generated $7.9 billion in direct gross domestic product in 2025. That single airport exceeded the $3.1 billion direct GDP contribution generated by all airports in Thailand combined, as well as Malaysia’s $3 billion total airport contribution.

    Taking into account trade, investment and productivity spillovers, Singapore’s broader aviation sector delivered $22 billion to the domestic economy. When factoring in the catalytic effect on tourist spending, the sector contributed $47.8 billion to Singapore’s GDP and supported 597,000 jobs. Direct tax revenue collected from Singapore aviation activity reached $3.1 billion in 2025, compared with $1.5 billion in Malaysia and $1.3 billion in Thailand.

    Across Southeast Asia as a whole, the aviation industry supported 23.3 million jobs and contributed $244 billion to total GDP in 2025. Long-term passenger traffic through ASEAN airports is projected to expand from 650 million travellers in 2024 to 2.9 billion by 2056, requiring heavy capital spending on runway and terminal expansions across the ten-nation bloc.

    Winter Scheduling Sets the Pricing Floor

    Airline scheduling teams are now finalising winter timetables and corporate fare contracts through the first quarter of 2027. With major East Asian carriers maintaining flight halts to Middle Eastern points and jet fuel trading well above historical averages, ticket yields on direct long-haul corridors will face little downward pressure over the coming two quarters.

    The critical metric to watch through December will be whether Gulf mega-hubs can restore scheduled transit seat capacity past the 85 per cent mark without triggering fresh route suspensions.

  • Fly High for Less: Vietnams Sky-High Slash in Airfares to Singapore and Thailand

    Fly High for Less: Vietnams Sky-High Slash in Airfares to Singapore and Thailand

    The surge in international flights operated by Vietnamese airlines has led to a reduction in airfare, even during the peak summer travel period. This is evident from the noticeably lower fares to popular destinations like Singapore and Thailand which are currently priced at half of last year’s rates. For instance, Hoang Loan, a resident of Ho Chi Minh City (HCMC), voiced his surprise at the reduced price while booking a flight to Singapore for a business trip, stating it was the lowest since the Covid-19 pandemic. According to him, “Last year, a one-way ticket from HCMC to Singapore cost VND3.2 million (US$122), while this year I paid just over VND1.6 million.”

    Growth in Capacity and Competitive Rates

    The significant rise in capacity by Vietnamese airlines this year has led to increased competition, resulting in lower airfares. Currently, tickets on these airlines for flights from HCMC to Singapore start at VND1.6 million, and VND1.9 million for flights to Bangkok. However, some foreign airlines operating on these same routes continue to charge two to three times these rates. The HCMC-Jakarta route has also seen a decline in fares, dropping from VND7-10 million in the past to VND6.3 million. In addition, airfares from Hanoi and HCMC to destinations in Europe and Northeast Asia have also experienced a 10-15% drop from last year’s prices.

    According to data from the British aviation provider OAG, Vietnam is expected to account for 7.3 million available seats in August, marking a 10% increase from the same period last year. This figure positions Vietnam second in Southeast Asia, surpassed only by Indonesia. Of the total available seats, Vietnam Airlines will account for 2.8 million and Vietjet Air for 2.2 million.

    Increased Flight Frequencies and New Routes

    Additionally, flight frequencies on some international routes have been increased and several new routes are set to be introduced. For instance, Vietjet has announced the increase of frequency on its HCMC-Kuala Lumpur route to seven flights a week during peak season. Furthermore, the budget airline is set to launch the HCMC-Colombo route on August 18 and the Hanoi-Almaty and Hanoi-Prague routes in October.

    Hong Thanh, the owner of a HCMC-based airline ticket agency, attributes the decline in international airfares to the increase in supply and competition among airlines. Particularly as the demand for overseas travel remains diminished this year. Contributing to this cooling is the fact that fuel costs have declined. On July 1, the government reduced preferential import tariffs, environmental protection taxes, and value-added tax policies on gasoline and aviation fuel until September 30, aiding in the reduction of airlines’ costs.

    Questions & Answers

    What has caused the reduction in airfare on Vietnamese airlines?
    Increased capacity and competition among airlines, along with reduced fuel costs, have contributed to the decline in airfare.

    How has the frequency of flights changed?
    Vietjet, for instance, has increased the frequency on its HCMC-Kuala Lumpur route to seven flights a week during peak season.

    What new routes are to be introduced by Vietjet?
    Vietjet plans to launch the HCMC-Colombo route on August 18 and the Hanoi-Almaty and Hanoi-Prague routes in October.

  • Domestic Airfares Skyrocket Amid Fuel Price Hike and Supply Chain Disruptions

    Domestic Airfares Skyrocket Amid Fuel Price Hike and Supply Chain Disruptions

    The escalating tensions in the Middle East have disrupted fuel supply chains, leading to a rise in average domestic airfares by 15-20%. This has resulted in airlines discontinuing their low-cost options.

    Demand and Supply Imbalance

    The disruption has severely affected the airlines as domestically, Jet A1 fuel only caters to around 20% of the demand. This has forced them to depend on imports from countries that are currently imposing export restrictions such as China, South Korea, and Thailand, as stated in a fresh report by the Airports Corporation of Vietnam.

    To combat this situation, airlines have started consolidating flights and suspending overnight operations. This strategic move is aimed at increasing the number of passengers per flight and optimizing load factors.

    Impact on Aviation Operations

    As a consequence of these adjustments, there has been a significant reduction in the number of takeoffs and landings at airports managed by the Airports Corporation of Vietnam (ACV). The unavailability of affordable tickets has led to a decline in passenger demand, especially in the leisure travel segment, as per the report.

    The International Air Transport Association has reported that jet fuel prices in the Asia-Pacific region surpassed $207 per barrel in mid-April, which is 2.4 times the average price in 2025. The airlines are confronted with further challenges due to fluctuating exchange and interest rates that are negatively impacting their operational efficiency.

    Passenger Statistics

    Despite these challenges, in the previous year, ACV airports welcomed 120.3 million passengers, marking a 9.4% increase. Among these, international passengers accounted for a 14% rise, reaching 47.1 million.

    Questions & Answers

    What has caused the rise in average domestic airfares?
    The escalating tensions in the Middle East have disrupted fuel supply chains, leading to a hike in average domestic airfares.

    How are airlines dealing with the disruption in fuel supply chains?
    Airlines are consolidating flights and suspending overnight operations to increase the number of passengers per flight and optimize load factors.

    What is the impact on passenger demand due to the rise in airfares?
    The unavailability of affordable tickets has led to a decline in passenger demand, especially in the leisure travel segment.

  • Business Class Airfares Set to Skyrocket in 2026 Amid Robust Economic Conditions

    Business Class Airfares Set to Skyrocket in 2026 Amid Robust Economic Conditions

    The current solid economic situation is predicted to lead to a rise in the cost of business class travel during the year. Meanwhile, the prices for economy class are projected to stay relatively steady, according to market experts.

    American Express Global Business Travel Consulting has suggested that a robust demand may trigger a 7.4% surge in business class fares for routes from Asia to the Middle East.

    Routes from Asia to Europe could see a fare increase of around 4.8%, while a 3.4% hike is expected for Asia to Australia journeys.

    The consulting firm also noted that the highly popular route between India and Singapore might witness a significant rise in fares. The air passenger traffic on this route reached an all-time high in 2024, with more than 5.5 million passengers according to data from Singapore Changi Airport.

    American Express Global Business Travel Consulting further mentioned that a hike in business class fares from Singapore to the US is anticipated. From 2026 onwards, all flights departing from Singapore will be required to use sustainable aviation fuel.

    Predictions for the Future

    Linus Bauer, the founder of aviation consultancy BAA & Partners, anticipates that passenger traffic in the Asia-Pacific region will increase moderately by 4% to 6%, equivalent to 150-200 million passengers, taking the total tally to approximately 3.8 billion.

    He believes that 2026 will bring a more mature pricing environment where economy fares will gradually decline, while premium yields will remain relatively stable.

    In the high-density, price-sensitive markets of South-east Asia, South Asia and Oceania, Bauer anticipates that average economy fares will be 5% to 10% lower than in 2025. This decline is expected due to an increase in narrow-body capacity and a larger market share for budget airlines.

    On the other hand, business and first-class fares are projected to remain steady or improve modestly by 2% to 5%. This stability is predicted to be supported by a stronger demand for premium leisure travel and a resurgence in corporate travel.

    Challenges Ahead

    Rico Merkert, a transportation and supply chain management professor at the University of Sydney, warns that inflationary pressures, such as increased airport and labour costs, will burden airlines. These costs are likely to be passed on to passengers, resulting in higher airfares, unless jet fuel prices remain low.

    However, he adds that the continued expansion of budget airlines and new entrants into the low-cost segment should help maintain the affordability of air travel in the Asia-Pacific region in 2026.

    Questions & Answers

    What factors could potentially lead to a rise in business class fares?
    Strong demand and regulatory requirements to use sustainable aviation fuel are two factors that could drive up business class fares.

    What trends are expected in the economy class segment?
    Economy fares are projected to gradually decline due to increased competition from budget carriers and an increase in narrow-body capacity.

    How might inflationary pressures impact airfares?
    Inflationary pressures such as higher airport and labour costs could lead to a rise in airfares, as airlines are likely to pass these costs on to passengers.

  • Airfares lowest in five years

    Airfares lowest in five years

    Domestic airfares are at their lowest levels in five years as demand remains low. Hoa of the central Quang Nam Province said: “I had to pay only VND370,000 ($16.37) for a flight from Chu Lai (in the central provinces of Quang Nam) to HCMC, a rate I have not seen in the last five years.”

    Hoa in Hanoi said a return ticket between the capital and Phu Quoc Island is now around VND1.1 million while even several years ago the cheapest fare was only VND1.5 million.

    Thu, who runs a travel agency in Hanoi, said a one-way ticket for a flight between Hanoi or HCMC to some central provinces now costs VND314,000-450,000, the lowest in five years.

    “But the number of passengers is still very small, except on key routes like HCMC-Hanoi, HCMC-Da Nang and Hanoi-Da Nang.”

    Surveys by VnExpress found that fares from HCMC to the Central Highlands town of Da Lat and the central town of Nha Trang are VND358,000, and to some other destinations are VND483,000.

    Vietjet Air sells a one-way ticket for a flight between HCMC and Hanoi at VND544,000, and Vietnam Airlines and Bamboo Airways at VND1.1-1.8 million, down 15-20 percent from a year ago.

    Carriers said they have yet to attract many customers because people are still worried about the Covid-19 threat and the stringent air travel requirements.

    A Vietnam Airlines spokesperson said: “We have resumed flights on 38 domestic routes and six international one. The number of passengers is still low, but flights between HCMC and Da Nang, and between HCMC and Hanoi are 80 percent full”.

    Vietjet said it would resume flying on 48 domestic routes by Nov. 30. It currently offers free rapid Covid tests for passengers departing from HCMC and Hanoi.

    Recently the Civil Aviation Authority of Vietnam proposed the resumption of international flights to 15 countries and territories in four phases between now and July.

    Vietnam closed its doors to foreign tourists and canceled all international flights in March last year to contain Covid, since then allowing entry only for Vietnamese repatriates and foreign experts and highly-skilled workers.