Airfares from Asia to Europe have risen by more than 500%. What will happen to prices next

Prices for air tickets on some routes connecting Asia and Europe have jumped by more than 500% this month and are not likely to drop significantly during the summer and fall, Bloomberg writes, citing data from the international consulting company Alton Aviation Consultancy. This is due to military actions in the Persian Gulf region - the busiest transit corridor in the world.

Flights connecting Asia and Europe via Dubai, Abu Dhabi and Doha - this corridor typically handles about a third of all annual traffic between these regions - were the most affected by the price increase. Alton analysts compared prices in February and March 23. A flight from Hong Kong to London Heathrow went up by 560% to $3318, the cost of a Bangkok - Frankfurt ticket soared by 505% to $2870, and from Sydney to London by 429%.

Fares for June on seven popular routes from Asia-Pacific to Europe are on average 70% higher than a year ago, Bloomberg writes, citing data from Alton and aviation analytics firm Cirium. A ticket from Sydney to London for this month now costs more than $1500 on average, about double last year's price. That said, relief is not expected anytime soon, Bloomberg emphasizes. Even in October, prices are expected to be 30% higher than last year's level.

The situation in the opposite direction is no less tense, Alton's research specifies. Prices for flights from Europe to Asia in June rose by 79% year-on-year, and the cost of some long-haul flights almost tripled.

The war in the Middle East has canceled about 70,000 flights and exposed the fragility of global aviation networks, Bloomberg notes. Airspace closures, reduced capacity at Gulf hubs and soaring fuel prices have all driven up ticket prices. Airlines have begun to pass the rising costs on to customers - fuel surcharges have risen for carriers such as Air France-KLM, Cathay Pacific and Air New Zealand.

Demand for air travel is already starting to fall due to uncertainty and cost: according to Cirium, bookings from Europe to the U.S. are down 15%, traffic in the opposite direction is down 11%, and bookings for flights from Asia to Europe are down 4.4%.

Even if the military conflict in the Middle East ends soon, pricing pressure will remain, says Alton Aviation managing director Brian Terry.

"It will take up to three months for price reductions to reach the jet fuel supply chain. What we are seeing is not just a short-term shock. Even when the direct disruption is gone, longer routes bypassing conflict zones, capacity shortages and high fuel costs will keep prices high for an extended period," he explains.

"Things are very uncertain right now because of the travel chaos," independent analyst Hanmin Li said in a Bloomberg commentary. - If travelers see flights being canceled and delayed, they will think very carefully about whether it's worth going anywhere at all."

In the three weeks since the start of the conflict in Iran, the combined market value of the 20 largest airlines has fallen by about $53 billion, according to calculations by the Financial Times. Investors are betting on a further fall in the shares. Low-coster Wizz Air has become the most frequently shorted stock in the FTSE 100 index, the newspaper said.

This article was AI-translated and verified by a human editor