We’ve been waiting years to go on holiday, but wow it’s expensive to fly. Here are the five reasons it’s so expensive to travel right now
Remember the good old days of competition in the travel industry? Those were the days. Now every time you look to book a flight, the prices are soaring. Even if you want to use your points.
The airline industry is complex, so a total shut down of the industry was always going to have long term effects. The long hangover from the shutdowns and lockdowns are with us.
So let’s break down the five key reasons your flight is so expensive.
“Revenge travel”
It’s not just you who wants to go overseas and change up the scenery. Everyone else is thinking the same thing.
And as the northern hemisphere enjoys its first lockdown free summer in years, everyone is clamouring to use all that saved up cash, topped up with government assistance, to spend on flights.
The simple supply versus demand philosophy means it’s become an airline’s dream to push up prices while often pushing down the value of the ticket. How bad are those airline meals at the moment?
Big planes are grounded
Remember the good old 747 and A380s? Well you’re doing well to find a 747 in the skies these days. The last remaining airlines that were operating them used the cover of COVID to either reduce their fleet of the ageing Queen of the Skies, or retire them altogether.
Then there’s the A380, which is integral to huge airline flees like Emirates.
They were first to go into storage in the desert in 2020 as the pandemic hit. Airlines noticed its often cheaper to fly two 787s on the same route as an A380. So they are begrudgingly bringing the super jumbo back, but only once all their 787s are back in service first.
Don’t you just long for the days of extra space on a plane?
Rocketing fuel prices
In some cases, spot prices for aviation fuel has soared to 80 per cent! Airlines usually rely on hedging fuel prices (as in locking the price in in advance). But not many carriers in Asia do that, meaning they are at risk of fluctuating oil prices.
Airlines have a simple strategy for dealing with rising fuel prices – passing the cost on to consumers. Some passengers flying out of Asia are finding that a flight to London in economy is now $5000, five times the price.
The war in Ukraine hasn’t helped matters either, with Russian oil now missing from the global supply chain. That’s pushing up the cost of resources everywhere, and there’s no sign that’s about to end.
Lack of staff
Airline staff get COVID too, and in some (hilarious) cases, front line staff are returning to stop working from home!
Airlines have rules in place regarding how many flight attendants and pilots need to be on board an aircraft. And with so many different types of planes in service, some flight attendants can only work on certain aircraft types.
That severely limits the capability of airlines to quickly man aircraft in an emergency. And one cancellation snowballs into a travel nightmare.
Airports are struggling too. Lack of maintenance at baggage carousels and airport equipment means some airports are relying on just one vehicle to help every plane back out of a gate.
Remember when the pandemic hit and airlines sacked thousands of workers? The airlines didn’t think they would need them all back so quickly, and highly skilled pilots went on to find other, perhaps more stable jobs.
Accountants taking over
Airlines are big businesses with gigantic overheads. Think of the cost of a plane, which often reaches over $300 million.
Then add the cost of airports, fuel and staff.
Qantas had a debt bomb of $6.5 billion at the height of the pandemic, and while governments have been throwing money at airlines to stay in business, they still are a business.
Airlines need to make a profit, they need to return value to shareholders, and they need to pay down debt to stay financial. Not to mention cashflow.
So regardless of the airport queue, or the soggy sandwich you’re eating in business class, think of the balding accountants praying for good news.
And keep your eye out for some bargains. It’s not all doom and gloom. Some airlines are even allowing you to burn your points on upgrades. So why fly economy?
And if you can hang on a few months longer, you might enjoy cheaper fares. But no promises.
Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.
Nvidia to build AI supercomputers in the U.S. for first time
Nvidia invests $500 billion in U.S. AI supercomputers, shifting production to Texas to strengthen supply chains and boost domestic growth amid rising tariffs and national tech pressures.
Nvidia invests $500 billion in U.S. AI supercomputers, shifting production to Texas to strengthen supply chains and boost domestic growth amid rising tariffs and national tech pressures.
Nvidia to build AI supercomputers in the U.S. for the first time — a $500 billion move that could redefine the global tech industry.
With new tariffs on imports from China and Taiwan, the chip giant is shifting production to Texas, partnering with Foxconn and Wistron.
Nvidia says the decision will strengthen its supply chain and boost domestic economic growth.
The announcement comes amid growing pressure to secure national tech infrastructure and reduce reliance on Asia. How will this impact jobs, prices, and America’s AI ambitions?
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Apple, once an innovator, faces criticism for stale updates and designs, prompting comparisons to 1980s IBM and calls for Tim Cook’s departure.
Apple, once a symbol of innovation, is now under fire for uninspiring product updates.
The headline “Has Apple lost its edge? Critics say it’s stuck in the past” captures growing frustration over recycled designs and underwhelming features.
From the original iPhone to the lacklustre Apple Intelligence, critics now compare the company to IBM in the 1980s. Is it time for Tim Cook to step aside?
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OpenAI is considering a social network to rival Musk’s X, spurred by the success of its new image-generation feature.
In Short
OpenAI is considering creating a social network to compete with Elon Musk’s X and Meta’s Instagram, following high demand for its new image-generation tool.
The company has raised $40 billion in funding and is facing increased server demands, prompting efforts to temporarily limit the tool’s usage.
OpenAI is contemplating the development of a social network to rival Elon Musk’s X and Meta’s Instagram, according to an informed source.
This initiative is reportedly in the early stages and has emerged following the success of OpenAI’s latest image-generation tool, which has stressed the company’s servers.
The announcement was first reported by The Verge, while OpenAI has chosen not to comment on the matter.
Image-generation
In March, OpenAI launched its new image-generation feature designed to create various visual content, including diagrams, infographics, and logos. This tool also enables users to produce artistic renditions from their uploaded images.
Recently, images generated by this feature have gained significant traction on social media, with OpenAI’s CEO Sam Altman recently using one for his profile photo on X. Altman noted the overwhelming popularity has led to increased server demands.
He mentioned that the company is currently looking to limit the feature’s usage temporarily while they enhance its efficiency.
The generative AI sector is highly competitive, particularly with the involvement of Musk’s xAI, which recently acquired X. The relationship between Altman and Musk has become contentious, particularly surrounding OpenAI’s move to become a for-profit entity.