Real cost of flying cheaper: IATA says airfares down 40%, but planes are stuck in traffic

The aviation industry remains under considerable stress despite a notable decrease in ticket prices. The International Air Transport Association (IATA) reports that the real cost of flying has decreased by 40% over the last decade, a statement made by Willie Walsh, the Director General of IATA, at their annual meeting in India. However, challenges such as significant supply chain disruptions, including aircraft delivery delays extending as much as 14 years, threaten airline profitability. IATA, representing over 350 global airlines, projects a combined profit of USD 36 billion for the year on rising revenues of USD 979 billion. This translates to a modest profit margin of 3.7%—equating to a mere USD 7.20 profit per passenger, as noted by PTI. Walsh emphasized, “Our profitability doesn’t align with the value we generate,” highlighting that aviation supports 86.5 million jobs and contributes 3.9% to global GDP. India’s aviation sector, while burgeoning, is witnessing intense demand alongside rising concerns over airfare volatility—even with the observed decrease in inflation-adjusted ticket prices. A major hurdle is the aircraft delivery backlog caused by manufacturers’ inefficiencies—currently estimated at 17,000 aircraft, leading to a predicted wait time of 14 years from ordering to delivery. Planned deliveries for 2025 are already 26% lower than anticipated last year, exacerbating an already critical situation, where over 1,100 relatively new aircraft are grounded, constituting 3.8% of the total fleet, significantly above the pre-pandemic average. Walsh noted that the slowdown in the fleet replacement rate, now at 3%, is well below the desired 5–6% level. As the industry grapples with these issues, soaring maintenance and leasing costs are affecting operational viability. Walsh pointed to regulatory inefficiencies as another major concern for the industry’s future, emphasizing that while business leaders assess expenditures based on cost-benefit analysis, politicians often do not. On the subject of aviation safety, there is troubling news as well; less than half of the aviation accident investigations conducted over the past six years have concluded with final reports, causing critical safety information to be overlooked. While 2024 recorded only seven fatal accidents from 40.6 million flights, resulting in 244 fatalities within a passenger count of 4.8 billion, it is notable that new risks arising from conflict zones are emerging, marked by incidents involving downed aircraft and bombed airports. Ultimately, while flying has become more affordable than ever, significant barriers such as aircraft shortages, bureaucratic entanglements, and global unrest continue to complicate the landscape of air travel. (With inputs from PTI)