Tony Fernandes: High Airfares Are Here To Stay
Now that traveling is a thing again, there have been a surge of people who are lining up to do so. If you’re among them, then chances are you have noticed that airfares are higher now than they were before. And it looks like these higher prices are here to stay, according to Capital A CEO Tony Fernandes.
Speaking to Bloomberg, Fernandes says that airfares are higher now because, among other reasons, “demand outstrips supply following rapid rebound in travel”. The report also quotes Fernandes as saying that “It’s not high prices, it’s real prices”. He also goes as far as saying that current prices should have been around since 2019.
To drive the point home, Fernandes also said that “airlines have always underpriced their product”. He also says that airlines have been “behind the curve” in that regard. Which is not exactly a comforting thing to hear coming from the CEO of an airline which popularised the slogan of “Now Everyone Can Fly”. With the current prices, even flying with a low-cost carrier has become a luxury.
For what it’s worth, the report also says that AirAsia will have all of over 200 planes in the air again much earlier than expected. A whole year earlier, in fact. Tony Fernandes says that while the airline initially predicted to only be able to achieve this in May of next year, it appears that it can be done by May of this year.
On one hand, that will tip the scales between demand for flights and their availability a little closer to equilibrium, at least for the low-cost carrier. But on the flip side, it remains to be seen if that will actually help resolve the issue of high airfares for AirAsia, let alone the flights offered by other airlines.
(Source: Bloomberg via Lowyat forum)
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