Is the era of skyrocketing airfares really coming?

01

Recently, I have noticed a flight ticket hoarding trend rising on social media platforms.

Not long after the 7-day National Day holiday, while most people are still planning their travel destinations for this winter, some highly motivated office workers have already booked all their outbound flight tickets for the whole year of 2027.

A netizen from Jiangsu Province shared a screenshot of her FLIGHTRADAR account, showing 19 flight segments in her upcoming trips list. She plans to take 10 days off next year, and has booked all the tickets: flying to Turkey and Egypt during the Spring Festival, taking All Nippon Airways to Japan during the Qingming Festival, traveling to Italy during the May Day holiday, and heading to Georgia during the National Day holiday. The total cost of all these tickets is only 17,000 yuan.

A few days ago, a netizen in Zhejiang Province spotted a round-trip ticket between Hangzhou and Georgia for the next National Day at only 3895 yuan in the early morning, and booked it immediately without hesitation. Many travelers in the comment section called it a real bargain, admitting that they spent more than 6,000 yuan on the same round-trip route this year.

The advance planning of office workers is not groundless, as the global aviation industry is shrouded in thick haze of rising prices.

According to Bloomberg's report on October 20, Ryanair CEO Michael O'Leary predicted in Brussels that due to the Middle East war continuously driving up oil prices, European flight tickets will see the highest increase in history next year, and airlines are forced to pass the fuel cost to consumers.

O'Leary also stated at a press conference that European air fares are expected to rise by up to 20% in the next 12 months. But he also raised the question of whether the rise in ticket prices is enough to cover the sharply increased oil costs.

O'Leary answered his own question, saying the increase is far from enough. He noted that since the escalation of the Iran conflict earlier this year, global airlines have been facing soaring aviation fuel costs, which has led to a decline in consumer demand.

Statistics confirm his view. On the other side of the Atlantic, data released by the U.S. Bureau of Labor Statistics shows that in September this year, the air fare index rose by 22.4% year-on-year, while the overall U.S. consumer price increase in the same period was only 3.7%.

Not only are air fares soaring in Europe and America, All Nippon Airways announced that for most routes departing from Japan to Europe and North America, the one-way fuel surcharge for tickets issued from November to December will be raised from 55,000 yen to 62,000 yen. The round-trip fuel surcharge alone will cost an extra 14,000 yen (about 600 yuan).

The price surge has also spread to the domestic market. Cathay Pacific recently rarely shortened the review cycle of fuel surcharges to every two weeks. The fuel surcharges for domestic routes also broke the usual downward trend after the National Day off-season on October 10, and rose against the trend to 50 yuan and 90 yuan.

The skyrocketing air fares have made many industry insiders quite emotional.

The other day at a tourism industry dinner, my media friends and I all missed the old days when Ukraine International Airlines and Aeroflot offered European flights with all-inclusive fares of only more than 2000 yuan, while Delta Air Lines and other carriers charged just over 3000 yuan for all-inclusive tickets to the United States.

Ukraine International Airlines taking off from Kyiv / Photo taken by Travel Daily

Another media friend at the table cut in, talking about his experience of booking a flight to London for a business trip this autumn. He followed my advice to book the ticket half a year in advance, and got an Etihad Airways business class ticket for 16,000 yuan. Half a month before the departure date, even the economy class ticket had risen to 12,000 yuan. My friend sighed that the appreciation of the ticket price is more satisfying than the rise of stocks. After all, the stock market is full of uncertainties, and booking outbound air tickets early is really a wise choice.

02

Why is the ticket hoarding craze on social platforms so intense during the off-season of travel?

According to data from the National Immigration Administration, during the just concluded National Day holiday, the number of mainland residents traveling outbound reached 4.444 million, a 9.3% increase compared with the same period last year. In the era of mass tourism, international travel has gradually become a part of daily life for ordinary office workers, but air tickets are still the first threshold for travel.

To put it plainly, hotels can be flexibly adjusted according to the budget, but if long-haul flight tickets rise to sky-high prices, travelers can only choose not to go, or bear the huge cost unwillingly.

On the other hand, the price of outbound air tickets has been extremely unstable in the past two years, and the once common myth of last-minute price cuts has almost disappeared. Overseas airlines would rather strictly control their capacity and cut flight frequencies than sell remaining seats at low prices on the eve of departure. The closer it gets to the holiday, the more likely travelers will encounter unexpectedly high ticket prices.

In contrast, every time the airline system opens long-distance bookings more than 300 days in advance, the background algorithm usually releases a small number of special low-fare tickets as usual.

Smart office workers choose to book at the right time, which is essentially grabbing the time difference against the airline's revenue management system, locking in low prices before fuel surcharges and taxes rise again.

As long as you book the air ticket in advance, no matter how the market price fluctuates later, travelers can safely start planning their itineraries and book hotels along the way. The confirmed travel plan has become the most effective defense against air fare inflation.

Others may worry about the ticket hoarders, fearing that if they can't get the vacation leave next year or there are unexpected changes, they will suffer losses.

But my friend who just booked the flight ticket to Georgia next year doesn't care at all. He said that Air China's APP allows one free refund and reschedule, so there is nothing to worry about.

In addition to making good use of the refund and reschedule rights given by airlines to their members, experienced travelers are also well aware of the flight change rules in the civil aviation industry. For international air tickets booked nearly 10 months in advance, the period will definitely cover two major civil aviation schedule adjustments: the winter-spring season change and the summer-autumn season change. The probability of minor adjustments to flight departure time or aircraft type changes is very high. As long as the airline adjusts the departure time by more than 15 to 30 minutes, passengers can reasonably apply for a full involuntary refund.

This operation is equivalent to getting a call option at zero cost, and you can retreat completely even if you can't travel next year.

The continuous expansion of visa-free countries has also removed the pre-barriers for advance ticket hoarding. In the past, tourists dared not lock outbound air tickets too early, largely because they were worried that visa rejection would make the tickets invalid.

Now, browsing the shared posts on social platforms, many countries in Southeast Asia, the Middle East, Africa, and even Central and Eastern Europe have implemented visa-free policies. Multi-year multiple-entry visas for Japan, South Korea, Australia and other regions are also very popular among young people.

Without the worry of losing money due to visa rejection, office workers will naturally dare to pay immediately when they see international round-trip tickets for the National Day holiday at only three or four thousand yuan. Beyond the cost-effective calculation, the long list of upcoming trips also provides rare emotional value for people in the workplace.

The Jiangsu netizen who shared 19 flight segments said directly in her post that the booked tickets are the motivation for her to go to work, and she will stick to her work at the desk for the whole next year.

Some people in the comment section marveled at her excellent planning ability, and she laughed and said it was a new skill she just learned on Xiaohongshu. Facing the highly uncertain external environment, spending a few thousand yuan to pre-purchase next year's holidays undoubtedly injects real expectations into the boring daily life.

03

Looking through the ticket grabbing boom on the consumer side, and examining the global civil aviation market pattern next year from the industry perspective, the international and domestic markets are moving towards completely different forks in the road.

It is almost a foregone conclusion that outbound air tickets will enter a rising channel. The hidden trouble that keeps European airlines up at night comes from the expiring low-price fuel hedging contracts.

In the past few months, many European airlines have maintained operations relying on the low-price options locked before the regional conflict at 67 US dollars per barrel. However, these relevant protection agreements will expire intensively in the spring of next year.

By then, Ryanair's fuel hedging ratio will drop sharply to 15%, and most European airlines will face the impact of high oil prices directly without any protection. Lufthansa predicts that its fuel expenditure this year will surge by an additional 1.7 billion euros.

A more difficult problem than oil prices is the passive shrinkage on the capacity supply side. Belgium plans to raise its aviation tax from 2 euros to 7 euros next year. The heavy tax burden has forced Ryanair to announce that it will cut 20 routes and reduce more than 1 million seats in the region this winter.

Small and medium-sized airlines are struggling in the mire of high costs, and mergers and acquisitions are accelerating the reshuffle of the industry. In addition, the detour of Asia-Europe routes caused by geopolitical conflicts and the delayed delivery of new aircraft from Boeing and Airbus, the combination of high costs and insufficient seats has locked in the rising expectation of international air fares next year.

Then, will the domestic air ticket market, which is also suffering from high oil prices, soar synchronously with international routes next year?

With this question, I consulted an executive of a domestic listed airline to hear his judgment on the record-high increase warning issued by Ryanair and the recent fuel cost pressure.

The executive admitted to me that the profits of airlines this year have indeed been eaten up by fuel costs. Looking at the financial reports for the first half of the year, the fuel cost of China's three major state-owned airlines all increased by more than 34% year-on-year, which directly led to a combined loss of more than 8.1 billion yuan for the three airlines in the first half of the year.

When asked whether the fuel surcharge will be adjusted later and whether domestic air fares can rise, the executive said directly that adjusting prices cannot solve the problem, and domestic air fares simply cannot go up. When I asked if the reason was the lack of consumer purchasing power, he only used four words to point out the most painful weakness of China's civil aviation industry: excess capacity.

Since some long-haul intercontinental air rights to North America and other regions have not been fully restored, and routes to Japan are also restricted, a large number of wide-body twin-aisle aircraft have nowhere to go, and can only be forced to operate on domestic trunk lines, leading to excessive internal competition.

The dense high-speed rail network on the ground has also firmly suppressed the price ceiling of short and medium-distance travel. Every time the fuel surcharge is raised, airlines usually secretly reduce the base fare to retain passengers in order to maintain the passenger load factor.

Restricted by the huge excess capacity, it is difficult for domestic air fares to rise unilaterally next year. They will only rise briefly during statutory holidays driven by rigid travel demand, and airlines have to offer huge discounts to attract passengers in the off-season.

The accounts of the global civil aviation industry are becoming more and more difficult to calculate. Overseas markets are forced to raise prices step by step due to capacity shortages and high oil prices, while the domestic market continues to digest its excess fleet scale under the pressure of high costs.

Facing the highly differentiated air fare market, ordinary people cannot change the general trend. Since it is impossible to figure out the complex game between oil prices and airlines next year, booking immediately when you see a good price is a smart choice.

This article is from the WeChat official account Travel Daily, written by Theodore Xishao, authorized for release by 36Kr.