Airline ticket prices have soared, here's why air travel has become so drastically expensive
Airlines have been incorporating the Hungarian government's special profit tax into the price of airline tickets, but rising operating and wage costs, as well as soaring fuel prices, have also made flying substantially more expensive.
In a few years, the price increase for some destinations has been tens of thousands of forints.
Since 2019, average roundtrip airline ticket prices from Budapest have typically increased by 40-60 percent, but there has been a 10,000 forint increase in some destinations just between 2022 and 2023, according to data sent to our paper by repjegy.hu.
The extent of the price hikes within Europe varies but is generally considered common. For example, a roundtrip ticket to and from London cost an average of 43,000 forints in 2019, which climbed to more than 60,000 forints last year. During the same period, a trip to Amsterdam went from 78,000 to 111,000, to Barcelona from 51,000 to 81,000, and to Athens from 47,000 to 74,000 forints. The numbers are even more extreme for overseas cities: Miami, which could be visited for 205,000 forints roundtrip in 2019, cost an average of 301,000 forints last year, while a trip to Bangkok skyrocketed from 188,000 to 360,000 forints - nearly doubling in price.
However, the price increase was not uniform, as the statistics show that in 2021, the average prices for most European destinations were more favorable than the year before the pandemic, but in 2023, there is no longer any destination where prices have decreased compared to the base year.
All amounts shown in the following graphic reflect roundtrip costs for one person, departing from Budapest, in the case of an actual purchase.
TICKET PRICES ROSE ABOVE THE EXTRA PROFIT TAX
It would be obvious to attribute the price hikes to the extra profit tax levied on airlines, but this does not entirely reflect the truth. ZOLTÁN HOLCZINGER, the online division manager of Weco-Travel Kft., which operates repjegy.hu, told 24.hu upon inquiry that the airlines build the extra charge into their prices, as this is the easiest way to collect the amount (airlines pay this fee monthly through ground service providers).
“The impact of the imposed tax on airfare prices is difficult to determine based on this alone, also to examine individually, as the prices of fuel, wages, as well as the cost of operation have also increased drastically over the past year and a half to two years, which the airlines are compelled to incorporate into the price of airline tickets. However, it can be said that there are airlines that have not, or only partially, reopened their Budapest routes after the pandemic, and the existence of the extra tax also plays a role in these decisions,” Holczinger shared.
For a European destination, due to the effect of the extra profit tax, the price of a roundtrip air ticket increased between 5,400 and 10,200 forints, depending on how modern the aircraft operated by the airline is. Currently, this fee is calculated based on greenhouse gas emissions. In its response, repjegy.hu pointed out,
“if we look at the most popular destinations on the continent (Rome, Barcelona, London, Paris), then it’s evident that the average airfare prices have increased by at least 18,000 forints during the examined period, thus significantly exceeding the amount of the tax.”
This was confirmed by BALÁZS BAKÓ, the spokesperson for the Hungarian Travel Agencies Association (MUISZ), who was approached by 24.hu. He stated that airlines' price increases are multi-faceted, including higher fuel prices and rising costs compared to 2019.
Nevertheless – or rather in conjunction with this – the desire to travel increased unmistakably in 2022, even compared to 2019, which was a very good year in terms of numbers of trips. This trend continued in 2023 and was even greater than the previous year.
“Flights remain popular. Domestic travelers – whether traveling for leisure or business purposes are undoubtedly price-sensitive, but this does not reduce the number of trips. It is more important to be aware that we should plan our trips as soon as possible, and book our flights and other related services early. What we see is that more and more people are turning to travel agencies, even for booking flights alone after the pandemic,” he added.
We should still expect airport chaos experienced in 2022, although not to the same extent. According to Zoltán Holczinger, the problem still persists because the pre-pandemic number of employees has not yet been reached; however, it no longer caused such chaos in 2023. Generally speaking, the increased desire to travel last year did not cause as much surprise as in the summer of 2022 when airlines and airports could not hire employees at an appropriate pace to ensure continuous operation.
He added, based on reports in the trade press, that the goal is not necessarily to rebuild the missing workforce, but rather to find ways to automate certain processes with the help of technology, such as handling luggage, with which they can also manage the mentioned problems ideally reducing the issues and also achieving cost savings in operations, which may hopefully curb further increases in airfare prices.
Two-thirds of planes depart on time from Ferihegy
We asked the Budapest Airport press office what the current situation is on the labor front at Ferihegy. They wrote in their response that the company ended the year 2023 with more than 1,600 employees, which is approximately two hundred more than before Covid.
The number of employees over the past five years is as follows (reflecting the number of employees as of December 31 of the given year):
* 2023: 1608
* 2022: 1445
* 2021: 1185
* 2020: 1017
* 2019: 1416
They highlighted that the decrease in the number of staff was caused by the collective layoffs necessitated by the pandemic. Thanks to the reviving passenger traffic, the number of employees began to grow again, and by the end of 2022, 131 of the colleagues affected by the previous layoffs returned to the BUD group. Along with the return of passengers, developments carried out by Budapest Airport also generated an increase in staff numbers. At the time of their response, there were currently 12 job opportunities available in the company.
They also revealed that although more flights were handled by the airport in 2023 than in the previous year, the punctuality of flights departing from Budapest improved compared to 2022. The punctuality of flights taking off from Liszt Ferenc International Airport is above average compared to European ACI airports,
with more than two-thirds of the flights departing on schedule.
In the airline industry, by general practice, a delay is counted if a plane departs more than 15 minutes after the scheduled time. More than half the time, the reason for the delays was that the planes arrived late to the Budapest airport, for example, due to the congestion of European airspace or weather conditions.
According to Holczinger, the problems related to flight and baggage delays have globally increased – a telling figure is that
complaints related to baggage problems have risen by 35 percent compared to 2019.
WHERE DO WE TRAVEL THE MOST?
In 2023, based on passenger numbers, London was the most popular destination with departures from Budapest, followed by Barcelona and Rome. According to repjegy.hu, generally speaking, the demand for Mediterranean regions and South European destinations has grown compared to 2019. For instance, Larnaca moved up from 66th to 22nd place, Naples from 34th to 15th, and Athens from 21st to 12th in this ranking.
According to information provided by Budapest Airport, the ranking of airlines based on passenger numbers last year were as follows:
* Wizz Air,
* Ryanair,
* Lufthansa,
* KLM
* and Turkish Airlines.
These companies together accounted for 72.6 percent of Budapest's passenger traffic and 64.5 percent of aircraft movements.
Balázs Bakó spoke about organized trips, saying that the most popular destinations depend on the time of year and the purpose of the trip. During the winter months, exotic beach holidays, partly cultural tours, and ski trips are the most popular. In the spring and fall months, cultural tours and European city trips are typical. In summer, most seek Mediterranean beaches; the most popular summer beach destinations for many years have been Croatia, Turkey, Greece, Cyprus, Italy, Spain, Egypt (the latter for a significant part of the year), and more and more people are also looking for Tunisia. Sea cruises, both individually and in groups, are also popular for much of the year.
Regarding this year's expectations, the spokesman for MUISZ is optimistic. As he said, pre-bookings for seaside holidays already started in December; the pre-booking period with gradually decreasing discounts lasts until the end of March. However, due to significant interest, places are filling up quickly, and everyone is encouraged to book their summer holiday as soon as possible. This is especially true for those traveling with families and those who plan their vacation period in advance.
Regarding future plans, we learned from Budapest Airport that the route development team is continuously working to realize new air connections - currently, establishing connections to southern China and India, as well as restarting North American flights, are among the main overseas targets. In terms of European connections, by the summer of 2024, we can expect an increase in seat capacity to several major cities, and new flights will start to the Mediterranean region.
Since 2019, average roundtrip airline ticket prices from Budapest have typically increased by 40-60 percent, but there has been a 10,000 forint increase in some destinations just between 2022 and 2023, according to data sent to our paper by repjegy.hu.
The extent of the price hikes within Europe varies but is generally considered common. For example, a roundtrip ticket to and from London cost an average of 43,000 forints in 2019, which climbed to more than 60,000 forints last year. During the same period, a trip to Amsterdam went from 78,000 to 111,000, to Barcelona from 51,000 to 81,000, and to Athens from 47,000 to 74,000 forints. The numbers are even more extreme for overseas cities: Miami, which could be visited for 205,000 forints roundtrip in 2019, cost an average of 301,000 forints last year, while a trip to Bangkok skyrocketed from 188,000 to 360,000 forints - nearly doubling in price.
However, the price increase was not uniform, as the statistics show that in 2021, the average prices for most European destinations were more favorable than the year before the pandemic, but in 2023, there is no longer any destination where prices have decreased compared to the base year.
All amounts shown in the following graphic reflect roundtrip costs for one person, departing from Budapest, in the case of an actual purchase.
TICKET PRICES ROSE ABOVE THE EXTRA PROFIT TAX
It would be obvious to attribute the price hikes to the extra profit tax levied on airlines, but this does not entirely reflect the truth. ZOLTÁN HOLCZINGER, the online division manager of Weco-Travel Kft., which operates repjegy.hu, told 24.hu upon inquiry that the airlines build the extra charge into their prices, as this is the easiest way to collect the amount (airlines pay this fee monthly through ground service providers).
“The impact of the imposed tax on airfare prices is difficult to determine based on this alone, also to examine individually, as the prices of fuel, wages, as well as the cost of operation have also increased drastically over the past year and a half to two years, which the airlines are compelled to incorporate into the price of airline tickets. However, it can be said that there are airlines that have not, or only partially, reopened their Budapest routes after the pandemic, and the existence of the extra tax also plays a role in these decisions,” Holczinger shared.
For a European destination, due to the effect of the extra profit tax, the price of a roundtrip air ticket increased between 5,400 and 10,200 forints, depending on how modern the aircraft operated by the airline is. Currently, this fee is calculated based on greenhouse gas emissions. In its response, repjegy.hu pointed out,
“if we look at the most popular destinations on the continent (Rome, Barcelona, London, Paris), then it’s evident that the average airfare prices have increased by at least 18,000 forints during the examined period, thus significantly exceeding the amount of the tax.”
This was confirmed by BALÁZS BAKÓ, the spokesperson for the Hungarian Travel Agencies Association (MUISZ), who was approached by 24.hu. He stated that airlines' price increases are multi-faceted, including higher fuel prices and rising costs compared to 2019.
Nevertheless – or rather in conjunction with this – the desire to travel increased unmistakably in 2022, even compared to 2019, which was a very good year in terms of numbers of trips. This trend continued in 2023 and was even greater than the previous year.
“Flights remain popular. Domestic travelers – whether traveling for leisure or business purposes are undoubtedly price-sensitive, but this does not reduce the number of trips. It is more important to be aware that we should plan our trips as soon as possible, and book our flights and other related services early. What we see is that more and more people are turning to travel agencies, even for booking flights alone after the pandemic,” he added.
We should still expect airport chaos experienced in 2022, although not to the same extent. According to Zoltán Holczinger, the problem still persists because the pre-pandemic number of employees has not yet been reached; however, it no longer caused such chaos in 2023. Generally speaking, the increased desire to travel last year did not cause as much surprise as in the summer of 2022 when airlines and airports could not hire employees at an appropriate pace to ensure continuous operation.
He added, based on reports in the trade press, that the goal is not necessarily to rebuild the missing workforce, but rather to find ways to automate certain processes with the help of technology, such as handling luggage, with which they can also manage the mentioned problems ideally reducing the issues and also achieving cost savings in operations, which may hopefully curb further increases in airfare prices.
Two-thirds of planes depart on time from Ferihegy
We asked the Budapest Airport press office what the current situation is on the labor front at Ferihegy. They wrote in their response that the company ended the year 2023 with more than 1,600 employees, which is approximately two hundred more than before Covid.
The number of employees over the past five years is as follows (reflecting the number of employees as of December 31 of the given year):
* 2023: 1608
* 2022: 1445
* 2021: 1185
* 2020: 1017
* 2019: 1416
They highlighted that the decrease in the number of staff was caused by the collective layoffs necessitated by the pandemic. Thanks to the reviving passenger traffic, the number of employees began to grow again, and by the end of 2022, 131 of the colleagues affected by the previous layoffs returned to the BUD group. Along with the return of passengers, developments carried out by Budapest Airport also generated an increase in staff numbers. At the time of their response, there were currently 12 job opportunities available in the company.
They also revealed that although more flights were handled by the airport in 2023 than in the previous year, the punctuality of flights departing from Budapest improved compared to 2022. The punctuality of flights taking off from Liszt Ferenc International Airport is above average compared to European ACI airports,
with more than two-thirds of the flights departing on schedule.
In the airline industry, by general practice, a delay is counted if a plane departs more than 15 minutes after the scheduled time. More than half the time, the reason for the delays was that the planes arrived late to the Budapest airport, for example, due to the congestion of European airspace or weather conditions.
According to Holczinger, the problems related to flight and baggage delays have globally increased – a telling figure is that
complaints related to baggage problems have risen by 35 percent compared to 2019.
WHERE DO WE TRAVEL THE MOST?
In 2023, based on passenger numbers, London was the most popular destination with departures from Budapest, followed by Barcelona and Rome. According to repjegy.hu, generally speaking, the demand for Mediterranean regions and South European destinations has grown compared to 2019. For instance, Larnaca moved up from 66th to 22nd place, Naples from 34th to 15th, and Athens from 21st to 12th in this ranking.
According to information provided by Budapest Airport, the ranking of airlines based on passenger numbers last year were as follows:
* Wizz Air,
* Ryanair,
* Lufthansa,
* KLM
* and Turkish Airlines.
These companies together accounted for 72.6 percent of Budapest's passenger traffic and 64.5 percent of aircraft movements.
Balázs Bakó spoke about organized trips, saying that the most popular destinations depend on the time of year and the purpose of the trip. During the winter months, exotic beach holidays, partly cultural tours, and ski trips are the most popular. In the spring and fall months, cultural tours and European city trips are typical. In summer, most seek Mediterranean beaches; the most popular summer beach destinations for many years have been Croatia, Turkey, Greece, Cyprus, Italy, Spain, Egypt (the latter for a significant part of the year), and more and more people are also looking for Tunisia. Sea cruises, both individually and in groups, are also popular for much of the year.
Regarding this year's expectations, the spokesman for MUISZ is optimistic. As he said, pre-bookings for seaside holidays already started in December; the pre-booking period with gradually decreasing discounts lasts until the end of March. However, due to significant interest, places are filling up quickly, and everyone is encouraged to book their summer holiday as soon as possible. This is especially true for those traveling with families and those who plan their vacation period in advance.
Regarding future plans, we learned from Budapest Airport that the route development team is continuously working to realize new air connections - currently, establishing connections to southern China and India, as well as restarting North American flights, are among the main overseas targets. In terms of European connections, by the summer of 2024, we can expect an increase in seat capacity to several major cities, and new flights will start to the Mediterranean region.
