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.
The Future of Life Institute fears there may be potential risks to society
Elon Musk and a group of leading A.I. experts are calling for a six-month pause on developing systems, more powerful than OpenAI latest version of GPT-4.
The Future of Life Institute fears there may be potential risks to society.
In an open letter signed by some of the biggest and influential minds in tech, the Institute wants the pause so frameworks can be constructed to better handle A.I.
“Powerful A.I. systems should be developed only once we are confident that their effects will be positive and their risks will be manageable,” the open letter said.
British computer scientist Stewart Russell is a signatory to the open letter, and he explains what is occurring in the sector that scares him.
“With what is gestating in computer and research labs, is for general purpose A.I,” Russell declared recently. “A.I. that can do anything that the human mind can be turned to.
“Because of the enormous advantages machines have over humans, I expect general purpose A.I. will far exceed human capabilities in almost every dimension.”
Alibaba shares have soared as company executives announce a business shake-up
It’s been a good day for investors in Chinese tech giant Alibaba.
Shares in the company soared as executives announced a plan to break the business into parts.
Alibaba’s commerce leader says he will split the $220 billion empire into six individual units.
The major restructuring is the company’s biggest in 24 years.
Alibaba shares gained more than 14 per cent in New York and were up 13 per cent in Hong Kong.
The move follows reports Alibaba founder Jack Ma resurfaced in China this week after a long absence.
The units will have their own chief executives and boards of directors.
They will be allowed to raise capital and seek stock market listings.
Alibaba says the units will “capture opportunities in their respective markets and industries, thereby unlocking the value of Alibaba Group’s respective businesses”.
“The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready,” says chief executive Daniel Zhang. #trending #featured
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As facial recognition becomes more prominent, the founder of tech firm Clearview says his company has run nearly a million searches for U.S. police.
It’s also been revealed the company has scraped 30 billion images from platforms such as Facebook and Instagram, taken without users’ permissions.
The company has been fined numerous times in Europe and countries like Australia for breaches of privacy laws.
In the U.S., critics say the use of Clearview by authorities puts everyone into a “police line-up”.
The company’s high-tech system allows law enforcement to upload a photo of a face and find matches in a database comprising of billions of images it has collected.
It then provides links to where matching images appear online.
The tool is considered to be one of the world’s most powerful and accurate.
While the company is banned from selling its services to most U.S. companies, there is an exemption for police.