Airline ticket prices are 30% more expensive in Fortaleza; understand reasons – Business

Air tickets were 30.57% most expensive in October in Fortaleza – the item with the biggest price increase in the month among those surveyed by the Broad National Consumer Price Index (IPCA), from the Brazilian Institute of Geography and Statistics (IBGE), released on Friday (10).

In the accumulated result for 2023, tickets were 26.22% more expensive, the third item that had the most price increase in the Capital. In first place on the IPCA list is mango, with 46.45%, followed by carrots, with an accumulated increase of 34.94%.

In relation to October 2022, the accumulated variation in the price of airline tickets in twelve months is 20.29%. Air tickets are among the five items that increased the most in the period in the Metropolitan Region of Fortaleza.

The significant increase in tickets is due to the expectations of companies with the approach of summer and the high season, according to Alessandro Oliveira, researcher at the Air Transport Economics Center of the Technological Institute of Aeronautics (Nectar-ITA).

The expert points out that the dynamic pricing model adopted by airlines, which have lower prices for tickets in low season, is increasingly aggressive. “It is part of a strategy to extract greater profitability from a segment of passengers who are less sensitive to prices, such as, for example, corporate passengers”, he explains.

Airlines look at their reservation system and start to see that idle capacity is not low. And this is a great time to ration demand where there is a shortage of seats and try to find gaps to channel this demand into other periods. So you have promotions for April, which end up diverting those price-sensitive passengers from the summer”

Alessandro Oliveira

Nectar-ITA researcher

Airlines will present a plan to reduce prices, says minister

The increase, however, is not exclusive to Fortaleza. So much so that, this Tuesday (14), the Minister of Ports and Airports, Silvio Costa Filho, announced that airlines must present a plan to reduce ticket prices within 10 days.

Regarding high prices, Gol states that the pricing curve practiced, considering advance notice and aircraft occupancy, allows different customer profiles to have access to air transport. Azul Linhas Aéreas, on the other hand, highlights the influence of external factors, such as the variation in the dollar and the price of fuel.

Latam points out that more attractive prices can be found by customers who plan trips in advance. “It is possible to find the best domestic fares in Brazil 6 to 2 months before your intended flight. In the case of trips abroad, this advance period is around 8 to 4 months”, says the company.

Alessandro Oliveira points out that companies are seeking to take advantage of the moment of strong demand to increase profits, as they are still recovering from the low demand caused by the pandemic. “Costs may not be rising, and this is a sector where demand and competition dictate a lot. Competition is ‘frozen’, because no strong competitor enters. What may be dictating this movement is demand, so companies gain a degree of freedom”, he comments.

Little flight offer

Another factor that leads to rising prices is the reduction in the number of flights offered, amid high demand. ITA postgraduate professor and PhD in Air Transport Economics, Rogéria de Arantes, points out that low supply intensifies the burden of dynamic pricing on consumers.

According to data from the National Civil Aviation Agency (ANAC), the number of seats sold leaving Fortaleza practically halved from 2019 to 2023. In August 2019, 134 thousand seats were sold. In August this year, the offer was 76 thousand seats. In the same period, the average value of tariffs increased by 48.8%.

The average price of airline tickets in Fortaleza was R$785.57 in August 2023, updated by the IPCA, the last period available for consultation. In August 2019, the average fare was R$527.78.

“There is a post-pandemic recovery in which demand increases significantly. So you have a scenario of fewer available seats and increased demand for tickets. If you talk to people who are traveling, you will hear that they always travel on crowded aircraft”, points out Rogéria.

The expert reiterates that companies are trying to recover from Accumulated losses in the years of travel restrictions, a period in which operations decreased, but companies still had to bear fixed rental and maintenance costs.

Rogéria’s prediction is that ticket prices will stabilize at high levels. The reduction in the price of aviation kerosene (QAV) by 2.1% by Petrobras in November, the first drop in four months, can only be felt in the medium term, according to the professor.

“This fuel cost is a transaction made in foreign currency and airlines sign price-setting contracts many months in advance. Today, airlines are paying a price for fuel that they negotiated when prices were higher. The effect of the eventual fall will only be felt for some time to come”, he explains.