Airasia CEO says the high rates aren’t going anywhere

Speaking last week at the Aviation Festival Asia in Singapore, Fernandes revealed his belief that airlines have been under-pricing their services and that the industry has a way to go in charging passengers an appropriate price.

However, higher airfares have not deterred or slowed down flight demands or demand projection, and Fernandes believes these airfares are more authentic prices that should have been charged pre-pandemic.

“After not having flown for three years, passengers’ value of travel has also increased,” Fernando said.

With many airlines facing challenges that hinder their ability to maintain and increase required capacity, classic supply and demand become a consideration. A shortage of available seats cannot meet the heightened demand, so Fernandes believes passengers can expect to be greeted with higher airfares this year.

Alongside this, airlines cannot acquire more planes due to the manufacturers’ ability to speed up production rates impacted by the pandemic. Without new planes readily available and old planes suffering from technical setbacks, carriers have to outsource third-party agreements for wet leasing and maintenance, increasing expenses.

Fernandes said AirAsia has faced these challenges, but the low-cost carrier will have its fleet of over 200 planes back in service by May.

“The main obstacle for us has been getting our planes back into active service, and bringing about 204 planes back is no easy feat,” he said

“And what was initially predicated on being finished by May of next year, we’ll be able to do by May of this year.”

The global commercial aviation industry struggles to get back on its feet due to similar problems AirAsia, so, unfortunately for travellers, getting back to pre-pandemic prices may still take a while.