Will flight prices go up or down in 2023 according to experts?
After a few difficult years the airline industry is set for a major comeback, but the cost for passengers will likely rise.
In 2020 and 2021 American travellers were forced to stay in the United States due to the pandemic-era travel restrictions. The covid-19 testing requirements were only eased in June 2022, meaning that most people missed out on an international summer holiday this year too.
But that is expected to change in 2023 with a huge jet-setting surge. In the first week of December 62% of searches for 2023 flights were for international destination, with a Hopper report claiming that international travel is set “for a big comeback.”
This trend has been given the moniker ‘revenge travel’ and it could send flight prices soaring in 2023.
Greater demand for flights after pandemic restrictions lifted
Personal finance expert Clark Howard believes that there are a number of factors that will contribute to high prices in 2023. The most significant, and perhaps the most obvious, is a surge in demand that could outstrip supply.
Clark explains: “Travel demand is actually higher than it was before, and there are a lot fewer seats to be sold to go in the air.
“So what happens is classic supply and demand economics at work: There’s intense demand, a shortage of supply, and something’s got to give and that’s the airfares have gone up a lot.”
To help keep costs low he advises travellers to be flexible with both the times and dates on which they fly. Using comparison sites like Google Flights can allow you to quickly flick through a wide range of options from different operators to find the cheapest option.
“Unless the economy goes into a much more serious recession than I expect, you’re going to see that demand is going to outrun the supply of seats for all of ‘23,” he says.
Airlines will look to boost profits after pandemic struggles
Few sectors were as negatively affected by the pandemic as the air travel industry. International flights were virtually non-existent for 18 months and even internal journeys were subject to restrictions, slashing airlines’ revenues almost overnight.
After three tough years the airline industry is in no position to offer allowances for passengers and will likely try to maximise profits in the years ahead. There is also little capacity within the industry to absorb price rises related to inflation and fuel price rises, meaning that the increase could be significant.
The pandemic-enforced travel restrictions also forced operators to shed a huge number of flight personnel, pilots and mechanics from their workforce. Now that the demand has risen suddenly, some companies may need to undergo a swift hiring spree to refill those roles.
After a sparse couple of years the travel industry will need to bring in cash to cover the cost of these new expenses, another factor likely to contribute to high flight prices in 2023.