Airplanes, declining seats and rising prices: has the era of low-cost air travel waned?

“Yes, travel, sweetly travel,” sang Lucio Battisti in his famous song, and in 2023 in Italy many have taken him at his word: in fact, almost 200 million passengers transited through Italian airports last year for tourism or business marking a new record, definitively archiving the Covid years. Leading the airline rankings in terms of number of passengers boarded is confirmed Ryanair, which in recent days with a press conference to the international media in Dublin emphasized that its main market isItaly and announced that for the next summer season it will further increase (for two years now) fares throughout Europe.

For 2024, in fact, a 7 percent decrease in available seats on its aircraft and the resulting increase in costs is expected. Leading to the lower number of available seats compared to demand were contingent events related to the non-delivery of new aircraft (“by June Boeing was supposed to deliver 57 Boeing 737 8-200s to us but they will probably limit themselves to 45-50” to which is added the “grounding of at least 10 percent of the Airbus A320 fleet for engine surgeries”), but despite this coincidental element, the era of the low-cost airline seems to be definitely over, as the Irish airline’s CEO Michael O’Leary had to announce just over a year ago(here the November 2022 Finestre Sull’Arte article). Ryanair’s CEO again this year explained how “our fares this summer will be higher, but with an increase of less than the 10 to 15 percent of 2023, I hope we can contain the price increases between 5 and 10 percent. We, however, have already launched the first promotional campaigns,” in Europe “there is a capacity problem” compared to the ever-increasing demand and “Eurocontrol estimates that we are still at 93 percent capacity compared to 2019 pre-covid and this should keep the cost of tickets high.”

Theprice increase is impacted, as mentioned, by delays in delivery of ordered aircraft, which have been 3,000 fewer than planned over the past 5 years. In addition, the grounding of Airbuses due to extraordinary maintenance on a particular type of engine has literally deprived many carriers of their planes for many months with few planes to be chartered for replacement, which are paid dearly, and unobtainable spare parts that have become very expensive. Add to this the increases in boarding fees made possible by thelast budget law. Today it is the boarding tax at 6.5 euros per passenger in many Italian airports, 7.5 euros in Rome Fiumicino and Ciampino, and 9 euros in Venice. If municipalities decide to increase the tax by three euros, or up to the maximum allowed, travelers from Italy would pay from 9.5 euros to 12 euros in municipal surtax.

The picture of air transport is delivered to us by the Corriere della Sera with the publication of data from the Cirium database processed by Leonardo Berberi from the analysis of which the ranking of the most chosen carriers for their travels is Ryanair both nationally and in Europe, but also worldwide as far as low cost carriers are concerned. The company thus holds a record that makes it a decisive player in the promotion and capacity for tourism development for any locality or country, having been the first to focus on smaller airports revitalizing territories hitherto lacking stable air links. It is no coincidence that O’Leary was keen to emphasize that “all countries are competing to welcome Ryanair flights,” well aware of the economic spin-off that the presence of his company at an airport has for the surrounding area. Tourism first and foremost.

Many airports, it is worth remembering, use economic incentives to attract Ryanair to their runways. In an interview with Corriere della Sera, the president of Assaeroporti (the association that brings together all Italian airport companies) Carlo Borgomeo quantified at 334 million the incentives that in 2022 were bestowed by airport managers on companies, to which another 170 million from different sources should be added, defining the incentive system positively: “Incentives are given to those who stay with the conditions established by the airports. If a low cost airline proposes a route that is not there why shouldn’t an airport facilitate the connection?” And on the boom in travelers Borgomeo explained how planes have been “more capacious and full. And every passenger polluted less. Thanks also to the policy of incentives to carriers” because “more and more in the negotiations between airport managers and companies among the incentive elements are the fill rate and the size of the jet.”

Of the nearly 200 million passengers flown to Italy, Ryanair has flown more than 60 million, and the top airports for passengers boarded on Ryanair flights, which operates 17 airports here, are top-ranked Bergamo Orio al Serio (which just wrapped up its year as Italy’s Capital of Culture along with Brescia: here are the 10 places not to miss on a visit to Bergamo), Bologna, Rome and Pisa. The city of the Leaning Tower was among the first chosen in Italy by the Irish giant so much so that in 2023 it will celebrate 25 years of operations at this airport with more than 50 million passengers carried. Regarding our country to the current 17 could be added 2 more and O’Leary spoke of Italy as “our main market, where we continue to grow: we expect an increase in Ryanair’s share in a market that has recovered rapidly, rising to 110% of precovid levels, thanks in part to us.” For the summer, it reported that there will be 48 new routes in Europe, 7 of which will involve Italy (on Rome-Fiumicino, Bari, Pisa, and Brindisi), where it has reshaped the offer of existing routes by eliminating some (on Sardinia, Sicily, Bergamo, Treviso, and Turin).

In the national ranking among the airlines with the most passengers we see that behind Ryanair is Ita Airways, which plans to increase available seats in 2024 by 9%; in third place is EasyJet (with a forecast of -9% in terms of seats offered in 2024), then Aeroitalia(here Finestre sull’Arte’s interview with CEO Gaetano Intrieri), which with its +93% is the emerging surprise of the moment considering also that it is an all-Italian airline. In fifth place are Volotea (-1.6 percent) and Wizz Air, which reduces seats by 45 percent, cutting about 840,000 seats. According to reports in Corriere della Sera, in 2024 Wizzair, EasyJet and Vueling will reduce by 2million seats on domestic flights going to penalize routes especially from southern regions. Overall, airlines for domestic flights in Italy planned to put a total of 32 million seats on sale, 0.6 percent less than last year.

Waiting to see the effects of the raised prices with the summer season schedules comes the denunciation of Furio Truzzi, also president of Assoutenti and the “Center for Consumer Education and Research,” who conducted an analysis of airline ticket cost data of the various airlines near Christmas and in mid-January pointing out the big differences in prices: tickets purchasable in December had had an increase of 1.260% over November’s listings for the same routes, and as soon as the holidays ended in January there was a drop of up to 91%.

With a survey conducted on the comparison site Skyscanner on Dec. 18, 2023 and Jan. 15, 2024, he was able to verify that a flight from Bologna to Palermo on Dec. 23, for example, paid 353 euros versus 31 euros for the same route departing on Feb. 10. The 358 euros from Bologna to Cagliari on Christmas Eve becomes 62. Another example on the Venice to Cagliari that the 379 euros needed to fly in December now costs 62 percent less or the Venice Palermo that has decreased by 79 percent. “The airfare increases caused by algorithms and dynamic pricing systems,” says Truzzi, “have doped the industry, with direct consequences on consumers’ pockets. We confidently await the results of the investigation opened by the Antitrust Authority (after the one closed with a nullity on the Christmas 2022 dear-flights) on the algorithms used by the airlines, to understand if these tools are legitimate or if, on the contrary, they represent an unfair practice to the detriment of consumers.” In 2023, Truzzi exposes, domestic flight tickets have undergone an average annual increase of 37.8 percent, an increase that is added to the 20 percent recorded in 2022, “aggravating Italians’ spending on travel.”

Airplanes, declining seats and rising prices: has the era of low-cost air travel waned?

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