Airfares Are Up 20%, Demand Is Strong. Even Airline CEOs Are Surprised.
Photo Caption: A United Airlines 787 near Dulles International Airport. Vincenzo Pace
Skift Take
Airlines across the world have been cutting capacity and raising airfares to keep up with higher fuel costs. But even as travel is becoming more expensive, consumers still want to spend.
Even as airlines around the world increase airfares in response to surging fuel prices, executives on both sides of the Atlantic told Skift that travel demand is not letting up. It’s not what they expected.
“I expected a bigger elasticity effect than we've seen so far. I still do expect it,” United CEO Scott Kirby told reporters at the IATA AGM in Rio de Janeiro. “But I've been a little surprised that we haven't seen more of that so far.”
Canadian low-cost carrier WestJet has not seen any demand dampen so far, despite increasing airfares to offset fuel costs, CEO Alexis von Hoensbroech said. “We were expecting that the higher airfares would lead to lower demand, but we don't see it,” he said.
