Airlines for America (A4A) Chief Executive Officer Chris Sununu stated on Sunday (August 30) that despite a significant increase in aviation fuel prices in the six months since the outbreak of the Iran War, ticket prices are expected to stabilize.
In an interview with “NewsNation,” a sister television network of The Hill, Sununu told host Chris Stirewalt, “People are realizing the high demand. I believe ticket prices will not increase significantly. I think prices will remain stable for a considerable period of time because unfortunately, we will not be able to shake off the Iran issue in the short term. And for regions like Asia and Europe, it poses a bigger problem.”
The average price of aviation fuel is currently at $3.82 per gallon, lower than the $4 in May.
According to data from the U.S. federal government, ticket prices in May rose nearly 27% compared to the same period last year.
Data from the U.S. travel search website Kayak shows that domestic and international flight ticket prices reached their peak in May, with domestic flight prices up by nearly $100 and international flight prices up by over $200 compared to the same period last year.
Sununu stated on Sunday that domestic flight ticket prices have risen by 20% and added that he doesn’t expect prices to continue rising.
He pointed out, “The demand is strong, people are traveling. This injects money into the economy in a variety of ways. So overall, economically speaking, it’s a very good thing.”
The former Governor of New Hampshire also mentioned that despite the strong demand, aviation fuel prices have already more than doubled, and airlines are bearing these costs themselves.
He analyzed, “So ticket prices have risen by 20%, but if airlines were to pass on all costs to consumers, ticket prices would effectively almost double. They haven’t done that, so they are still competitive.”
Airplane fuel is one of the largest operational expenses for airlines, and with record-high fuel prices this year, airlines are taking measures to cope with the pressure of soaring costs by cutting growth plans, reducing unprofitable flights, and increasing ticket prices.
Take Delta Air Lines, for example. The company’s CEO Ed Bastian mentioned in an interview with CNBC in July that Delta Air Lines has passed on approximately 60% of the fuel cost increases to consumers in the past few months, and in the third quarter of this year, this percentage will be close to 100%.