Airline ticket prices sky-high as seat supply falls short of demand

International airfares have skyrocketed ahead of the holidays due to a supply-demand imbalance.

The departure lobby at Incheon International Airport [YONHAP]

International airfares have skyrocketed ahead of the holidays due to a supply-demand imbalance.

Korea has too many travelers and not enough seats.

Due to staff shortages and higher oil prices, ticket prices have been rising steadily, and they could remain expensive into the new year.

“A roundtrip flight between Korea and Vietnam cost 620,000 won ($486) a day ago, but that rose to 800,000 to 900,000 won in a day,” wrote one user on an online Vietnam travel community.

“For a family of three, flight tickets cost around 1.1 million won at the beginning of last month, but that increased little by little and now cost 1.6 million won,” complained another online user on a Japan online travel community.

According to the airlines, the cheapest round-trip price between Seoul to Tokyo for December is 400,000 won as of Thursday. That is double or triple the prices before the pandemic, as eased border controls coupled with weaker yen add to Japan being a top travel destination.

Ahead of the winter vacation season, demand is outweighing supply, with fewer seats to sell, hence higher flight prices.

Demand for international flights in particular is soaring, while airlines are struggling to return to pre-pandemic performance due to staffing shortages.

According to Air Portal run by the Ministry of Land, Infrastructure and Transport, the number of international flights by domestic airlines last month was 13,729, which is only 60 percent of November 2019's 22,608 international flights, just before the outbreak of the pandemic.

The Gimpo-Haneda route operated 450 flights in November, but that was 37.5 percent fewer than November 2019’s 720 flights.

“Due to reasons such as a shortage of staff in Japanese airports, we haven’t been able to increase the number of flights as much as we wish,” a source from the airline industry said. “The current situation hasn’t yet fully recovered from the aftermath of the Covid-19 pandemic.”

Jet fuel prices are also affecting ticket prices.

Global oil prices — which determine fuel surcharges — have fallen since August.

That also brought down the fuel surcharges, but they are still high compared to the times before Covid-19.

In the case of Japanese flight routes, for instance, fuel surcharges were only around 10,000 won before the pandemic, but they stand at around 50,000 won in December.

Experts believe airfares will stop going up early next year when there is likely to be enough supply to meet the soaring demand.

“I believe prices will stabilize around the beginning of the year when the supply and demand problem is solved,” said Hwang Yong-sik, a professor of Business Administration at Sejong University.

Low growth is another variable.

"If the economy goes into recession from next year, demand may rapidly decrease, affecting ticket prices," an aviation industry source said.

BY KANG KI-HEON, SEO JI-EUN [seo.jieun1@joongang.co.kr]