AirAsia CEO says high airfares aren’t going anywhere

AirAsia CEO says high airfares aren’t going anywhere

A problem sweeping the travel industry right now, and it seems to be the number one problem amongst many, is exorbitantly high airfares.

Even low-cost carriers, which struggle to increase capacity amidst labour shortages, soaring fuel prices and closed airspace, have set prices that have stumped travellers.

And if you think this is going anywhere, it’s not – at least that’s according to AirAsia’s CEO Tony Fernandes.

Speaking last week at the Aviation Festival Asia in Singapore, Fernandes revealed his belief that airlines have been under-pricing their services and that the industry has a way to go in charging passengers an appropriate price.

However, higher airfares have not deterred or slowed down flight demands or demand projection and Fernandes believes that these airfares are more authentic prices that should have been charged pre-pandemic.

“After not having flown for three years, passengers’ value of travel has also increased,” Fernando said.

“If you can’t have something for three years, you start to see how significant it was.”

With many airlines facing challenges that hinder their ability to maintain and increase required capacity, classic supply and demand become a consideration. A shortage of available seats cannot meet the heightened demand, which is why Fernandes believes passengers can expect to be greeted with higher airfares this year.

Tony Fernandes, CEO AirAsia

Alongside this, airlines literally cannot acquire more planes due to the manufacturers’ ability to speed up production rates being impacted by the pandemic. Without new planes readily available and old planes suffering from technical set-backs, carriers have to outsource third-party agreements for wet leasing and maintenance, increasing expenses.

Fernandes said AirAsia has faced these challenges, but the low-cost carrier will have its fleet of over 200 planes back in service by May.

“The main obstacle for us has been getting our planes back into active service, and bringing about 204 planes back is no easy feat,” he said

“And what was initially predicated on being finished by May of next year, we’ll be able to do by May of this year.”

The global commercial aviation industry struggles to get back on its feet due to similar problems AirAsia, so, unfortunately for travellers, getting back to pre-pandemic prices may still take a while.

Latest News

  • Destinations

Half price winter warmers at Sydney’s luxury lodges at  Calabash Bay and Crane

Wild Luxury has released its off-peak rates for winter, with stays at Calabash Bay Lodge and Crane Lodge discounted by almost half price for a limited time. Nightly rates at Wild Luxury’s Palm Beach eco retreat, Crane Lodge, are reduced to $1144 for a seven-night stay (48% off the $2200 nightly regular rack rate) or $1760 per […]

  • Conferences
  • Hotels

Iconic Sofitel Sydney Wentworth showcases conferencing and events ahead of spring opening

Sofitel Sydney Wentworth is showcasing its venue for conferencing and events that will feature as part of the iconic venue’s highly anticipated $60 million relaunch this in September. Among the offerings at the Phillip and Bligh Street precinct are contemporary meeting rooms, more than 15 event and conference spaces and the famous Wentworth Ballroom, where […]

  • Aviation

Board Air Canada in Sydney’s CBD via a sleek Light Rail

Visitors flocking to Vivid Sydney will glide through the CBD in the newest addition to the Air Canada fleet – a sleek Light Rail tram wrapped in the airline’s unique livery. The Air Canada-themed tram is part of a new marketing campaign designed to put Air Canada in lights during the Vivid Sydney festival (25 […]

  • Cruise
  • News

Carnival Splendor to the rescue of Aussies and Kiwis left stranded in Vanuatu

Carnival Cruise Line’s Carnival Splendor has come to the aid of a group left stranded in Vanuatu, following the collapse of Air Vanuatu. The group, eight Australians and one New Zealander, were visiting the island of Santo when Air Vanuatu cancelled all flights, leaving them without a way home. Carnival Cruise Line responded by offering […]

  • Hotels

QT Singapore set to open in heritage Eastern Extension Telegraph building

Bookings open today for QT Singapore, in the historic former Eastern Extension Telegraph building along Robinson Road, the first property from QT Hotels & Resorts to open outside Australian and New Zealand. Previously Accor’s So Singapore, then the Hotel Telegraph, QT Singapore will officially launch on September 16 and will feature 134 rooms, ranging in […]