TRANSPORT. Every month, the Directorate-General for Civil Aviation (DGAC) publishes its passenger air transport price index. In one year, Reunion ticket prices have increased by 29.6% compared to 2021. This sharp increase is due to several factors.
While inflation continues to rise dizzyingly, the rise in prices of consumer goods or services continues to strain Reunionese’s wallet a little more, both in metropolitan France and in Réunion. The most recent example is the publication by the DGAC of its price index for air passenger transport. What do we learn there? Prices for air departures from Réunion recorded an average increase of 29.6% in March 2022 compared to 2021. A new increase following +8% in February and +10% in January.
The DGAC explains in its publication: “Overall, on departure from the overseas departments, the first quarter ended with a particularly significant increase in airfare prices with prices increasing by 14.3% (+8.9% in total. This trend affects the four departments, but it is again from Réunion that prices show the highest increases, both on intra-OM routes and to mainland France (+30%).†
Prices return to 2019 level
Admittedly, this dramatic increase is undesirable for consumers in the current circumstances, but prices charged in March are returning to levels equal to or even lower than those already in place before the health crisis, as noted by the DGAC. “Despite this dynamic, and with the exception of Guyana, ticket prices remain lower than in 2019.”
Why this sharp increase? The aviation sector has been shaken up by the health crisis. Between early 2020 and late 2021, the many lockdowns related to travel restrictions had prompted companies to compete by offering particularly low fares as they were unable to fill their planes. Another element to keep in mind: oil prices were at their lowest during the same period. A situation that would also have led to a fall in prices.
But since the end of the year, the post-covid economic recovery has had a negligible impact on the price of black gold. At the beginning of January, the price of a barrel of Brent reached its highest level since 2014. Brent and WTI even closed 2021 with gains of around 40%. Since then ? They continue to rise, driven by the economic recovery, but also by the war in Ukraine. You should know that fuel costs represent 35 to 45% of the price of a long-haul ticket, even if this increase is not passed on to travelers in the same proportions.
Then it is also necessary to focus on supply and demand. The end of the health restrictions is now forcing the Reunionese to want to travel more. And after two financially complicated years, heavily indebted companies are tempted to catch up by finding airline ticket prices comparable to those seen before the health crisis. Above all, it will be necessary to take stock of the year 2022 and to keep a close eye on oil fluctuations. In mid-March, the International Energy Agency (IEA) feared “global oil supply shock” in connection with the consequences of the conflict between Russia and Ukraine. In this case, the effect on prices can be particularly large.
Julien Delarue
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