Retail News CRM

Tag: airfares

  • 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.