Air Travel Outlook for 2025: Higher Ticket Costs Amid Supply Chain Constraints and Boeing Delays

Airfare is forecast to rise in 2025 due to inflation and increased demand, despite supply chain challenges for Boeing and Airbus. Boeing's quality issues and production setbacks, exacerbated by regulatory restrictions, contribute to a shortfall in plane deliveries. This limits airlines' growth strategies, potentially leading to fewer seats and higher fares. As more people travel, the limited supply of aircraft will likely push up ticket prices further, with airlines expecting a 5-10% fare increase.

Air travel, a vital component of the global economy, is set to experience a significant change in the coming years. According to recent forecasts, airfare is expected to rise in 2025 due to inflation, increased demand, and supply chain challenges facing major aircraft manufacturers Boeing and Airbus (1).

Boeing's ongoing quality issues and production setbacks, exacerbated by regulatory restrictions, have contributed to a shortfall in plane deliveries. This limits airlines' growth strategies, potentially leading to fewer seats and higher fares (2). As more people travel, the limited supply of aircraft is expected to push up ticket prices further, with airlines forecasting a 5-10% fare increase (1).

The global airline fleet has been struggling to keep up with demand, leading to aircraft capacity constraints. This issue is expected to persist through 2024, limiting airlines' ability to restore and grow intercontinental networks (2). Flag carriers such as Lufthansa and KLM have already revised their available seat capacity downward for the full year 2024 (2).

Connectivity lags as airline volume recovered in a different style, with networks downsized throughout the pandemic and only gradually being restored (2). This concentration of air traffic within fewer routes puts a strain on flight activity, which sits at 91.5% in 2023 (2).

Beyond supply chain challenges, the geopolitical environment has also changed the map of airlines, with flights to Russia from the West suspended and flights to Israel and Iran affected by cancellations (2).

In conclusion, the combination of inflation, increased demand, and supply chain challenges facing the aircraft manufacturing industry is expected to lead to higher airfare in 2025. With capacity constraints limiting the ability of airlines to restore and grow intercontinental networks and connectivity lags slowing the recovery of flight activity, travelers should anticipate a challenging and more expensive air travel experience in the coming years.

Sources:

1. https://ca.news.yahoo.com/airbus-may-benefited-boeings-struggles-104705587.html
2. https://think.ing.com/articles/global-aviation-outlook-supply-constraints-cloud-the-skies-for-airlines/