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Soaring Flight Tickets

  • Author :
  • TATA AIG Team
  • Published on :
  • 11/07/2023

Soaring ticket prices for domestic and international travel have caught nearly everyone off guard this year. These flight ticket price increases have affected both frequent flyers and the tourism sector as a whole and are not just specific to India but to almost every region in the world.

While it is no secret that plane tickets have never been cheap. This issue has been recently exacerbated, prompting many travellers to ask, “Why are flight tickets so expensive now?”

Online booking sites and better search tools have made it easier to find discounts, but it still doesn’t negate the fact that there has been a 50% to 100% increase in airline prices in India. In this blog, we will be discussing what is causing these recent flight ticket price increases.

Why Have Flight Prices Gone Up?

One of the biggest reasons why flight prices have increased is due to supply and demand. The pandemic brought with it a drastic drop in demand for flight tickets and air travel, but it is now back in full swing. Adding to that are the rising fuel prices and inflation.

Post-pandemic, most people started travelling again after being cooped up for so long. As a result, most are willing to pay travel agencies and airlines the going rates despite the price hikes. In short, airlines are facing record-high bookings from the pent-up demand and are struggling to keep up.

These prices are compounded when we consider peak travel seasons, urgent flight bookings, longer itineraries and multi-flight trips with different airlines. According to Diana Hechler, president of D.Tours Travel, “Airlines will charge what the market will bear, as long as they can get away with it.”

Top Reasons Why Flight Fares Have Increased

  • The DGCA Removing the Airfare Cap and Airline Privatisation

  • Inflation

  • Price of Oil

  • Covid-19 Restrictions

  • Not Enough Planes

  • Not Enough Pilots or Other Airline Staff

Now, let us take a closer look at these reasons to know more about what is causing airlines to have their flight rates increased.

- The DGCA Removing the Airfare Cap and Airline Privatisation

For those unfamiliar, the DGCA, short for Directorate General of Civil Aviation (DGCA), is the regulatory body that governs airline regulations. They primarily deal with airline safety regulations but are also in charge of air transport services to/from/within India and for enforcement of civil air regulations and airworthiness standards.

The DGCA removing the airfare caps after the pandemic to help airlines recoup their losses has led to a direct flight ticket price increase, with airlines increasing all possible charges.

Coupled with airline privatisation, airline fares are no longer fixed and prone to sudden and significant hikes and drops. This is one particular reason why flight prices have increased in India.

- Inflation Being a Reason For Flight Ticket Price Increases

As stated, flight rates have increased at much higher and faster rates than inflation. However, the rising inflation rate affects other areas, which has a tangential effect on airline prices, spiking them even higher.

For example, inflation is pushing prices of the most basic items, putting pressure on everything else, from the pilots’ salaries to the services and accommodations airlines provide, which as a result, also affects the flight ticket prices.

- Increasing Oil Prices For Why Flight Tickets Are So Expensive Now

Jet fuel is often an airline’s biggest expenditure after labour costs. Coincidentally, fuel prices have been steadily increasing since the start of the pandemic. With the Russia-Ukraine crisis, it has increased even more, which is why flight prices have increased.

As a side effect of the war, it has also led to the international shunning of Russian airlines and more demand for non-Russian ones, which can also be counted as a factor for why flight prices have gone up.

- Covid-19 Restrictions

Despite most countries lifting travel restrictions and relaxing Covid-19 restrictions, some countries like South Korea and Japan still have stringent restrictions in place even after re-opening their borders in 2022.

Furthermore, China, one of the biggest markets in this region, still remains closed.

Many Asian countries also struggle with massive labour shortages, which has led to an increase in operational costs in the midst of dealing with post-pandemic flight demands.

- Shortage of Planes

During the pandemic, many airlines retired their older planes, expecting to eventually replace them with newer fuel-efficient models. However, due to the sudden increase in demand, many airlines have faced delays in aircraft delivery and manufacturing caused by supply chain issues.

- Shortage of Airline Staff

Most industries faced severe labour shortages after the pandemic, with airlines being hit especially hard.

In some cases, airlines do not have enough crew members to manage the increased demand despite having enough planes. Facing this increased demand while still short-staffed has led to increased operational costs, affecting ticket fares.

Will the Flight Ticket Price Increase Ever Go Down or Change?

Now that we have answered — “Why do flight prices increase?” — it is time to look into the possibility of them ever decreasing. While ticket prices may seem impossible to predict, two factors may be helpful.

- Possibility of A Recession: The high possibility of a recession could dampen the travel demand and bring down airline fares.

- Competition Between Airlines: The airline industry is highly competitive. New players enter and exit the market every year, with airlines continually undercutting each other to offer cheaper prices. An increase in demand has only encouraged this.

How To Find Cheap Airline Tickets?

Online booking sites have made this process easier, but with the rise in online booking, ticket prices are determined by online algorithms via dynamic pricing.

As a general rule, it is better to follow these tips when booking your tickets online:

  • Avoid travel during blackout days and peak seasons. This involves avoiding travel during holidays like Christmas, Diwali, New Year, etc., as this is when most people book their trips and vacations.

  • Avoid peak seasons in your destination countries when travelling internationally. You must research festivals, national holidays and peak and low seasons of the country you are travelling to, as it can indicate flight ticket price increases.

  • Book tickets well in advance or when airlines release their flight schedule. Often the best time to book your flights would be 3 - 6 months in advance to avoid any major price fluctuations.

  • You can also consult a travel agency to help you find the best deals, as most either have pre-purchased tickets for major sectors or special deals with airlines.

Does Having a Travel Insurance Plan Help?

This will depend on your travel destination. Some countries mandate that you have an overseas travel insurance plan, while it is merely optional for others. Most people also don’t consider it a necessity when travelling domestically.

However, since we are discussing why flight rates have increased and ways you get around the price hikes, getting a travel insurance plan might be a smart investment on your part. This is because flight ticket price increases are volatile.

This can affect your refund amount in cases where you have had to cancel your flights. For example, you might have bought your ticket when the prices were up, but if the prices were down during your refund period, it would result in lost expenses.

This is where having a travel insurance plan can be beneficial. Plans from our site offer flight cancellation coverage and an easy process for when you file claims for a travel insurance policy during your trip. This way, you are also covered before your trip.


Several factors contribute to flight ticket price increases, but at its core, supply and demand are the primary driving forces. Simply put, when more people want to fly, airlines know they can charge higher prices because travellers will still pay for it.

So if you plan to travel anywhere during peak season or the holidays, even domestically, getting a travel insurance plan is recommended to prevent lost expenses.

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