Low-Cost Airline Ticket Prices on a Downward Spiral in Summer 2023
In an exciting twist, ticket prices for budget airlines plummeted during the summer of 2023 compared to the same period the year prior. This revelation comes courtesy of a report published by the German Aerospace Center (DLR) on a Thursday. The study shows that the average gross ticket price dropped from around 68 to 119 euros per ticket to 58 to 102 euros. Despite this decrease, low-cost fares are still substantially pricier than they were in 2019.
Europe's overall aviation traffic is still lagging about 10% behind pre-pandemic levels, as per the DLR. Low-cost flights make up around 35% of the European market, while in Germany, they account for less than 30%.
The DLR team compiles low-cost airline ticket prices twice a year for its "Low-Cost Monitor." For this analysis, they focus on selected flight routes from major low-cost carriers in Germany, including Eurowings, Ryanair, Easyjet, and Wizz. The researchers calculate the average prices based on various advance booking periods ranging from a single day to three months. The findings are based on data collected during a reference week in July 2023.
According to the analysis, a total of 45 countries offered destinations within the low-cost segment during summer 2023. As in 2022, the most popular locations were in Spain, Italy, and Germany. Over 90% of the 735 routes were served exclusively by one low-cost airline, according to the report.
Eurowings holds the largest low-cost airline base in Germany with a market share of 51.1%, followed by Ryanair (27.1%), Wizz (8.6%), and Easyjet (7%).
Further Insights
Several factors played a significant role in driving down the prices of low-cost airlines during the summer of 2023:
- Post-Pandemic Recovery: The COVID-19 pandemic had a devastating impact on the aviation industry. As travel demand increased, airlines adjusted their pricing strategies to attract customers more effectively, leading to lower fares.
- Fuel Price Reduction: The average jet fuel price in 2024 was $2.39 per gallon, which is 10% lower than in 2023. With fuel prices decreasing, airlines' operational expenses were reduced, allowing for cheaper tickets.
- Intensified Competition: The low-cost airline sector witnessed significant growth in 2024, resulting in increased competition among airlines. This heightened competition led to more affordable pricing to entice passengers.
- Seasonal Demand: The typical summer travel demand increased but settled at stabilized, potentially lower prices due to the market having already adjusted to higher demand levels post-pandemic.
Although ticket prices for low-cost airlines were lower in summer 2023 compared to the previous year, they were still significantly more expensive than before the pandemic in 2019. European flights in 2024 managed to reach 96% of their 2019 levels, with low-cost airlines leading the way due to strong tourism and domestic flow growth in Italy and Spain. North-East Europe has not entirely recovered, with airspace closures and flight bans keeping the region below pre-pandemic levels.
Combining these factors, the reduced ticket prices in summer 2023 were primarily due to increased competition, lower fuel prices, and the ongoing post-pandemic recovery. The prices have stabilized closer to pre-pandemic levels while maintaining relative stability compared to the immediate post-pandemic surge.
