Skyrocketing Christmas Flight Prices in Ireland

Image Source: Daa Internacional - Dublin Airport 

If you want to leave Ireland or visit the country at Christmas time, you notice that the prices of the tickets can be higher than usual, even for that specific time of the year. Some flights went 2x to 3x more expensive this year. So, if you are being affected by this price increase, you should know there is a reason. But to understand this, first, we must understand how ticket prices or airfare work.

To explain how the commercial aviation market works, we need to learn 2 things:

1 - What is an airport slot?

An airport slot is authorization given to an airline to take off or land at a specific airport at a designated time. Since airports have limited capacity in terms of runways, gates, and infrastructure, the use of slots helps organize and control air traffic, especially at congested airports. These slots determine the maximum number of flights an airline can operate on a given day, ultimately limiting the number of available seats on routes.

2 -  How does the airfares market work?

Flight ticket prices change constantly, and some reasons lead to all those changes.

1. Supply and Demand

Flight prices operate on a dynamic pricing model, where supply and demand are the main drivers. Prices increase as demand for seats on a specific flight rises and availability decreases. Airlines use sophisticated algorithms to adjust fares based on how many seats are sold, how much interest there is, and how close the flight date is.

2. Fuel and Operational Costs

Fuel prices are another major factor influencing ticket costs. As global oil prices fluctuate, so do the expenses of operating aircraft. While fuel costs directly affect airlines' operating budgets, they can cause gradual changes in flight fares. Operational costs like staff wages, maintenance, and airport fees (departure and destination airports) also influence the final price.

3. Airport Fees and Taxes

Different airports impose varying fees, and some airports are more expensive to operate from than others. For instance, flying into a central hub like London Heathrow typically incurs higher costs than a smaller regional airport. These additional costs are factored into ticket prices and passed on to passengers.

4. Seasonality

Flight prices are susceptible to the time of year. During high-demand travel seasons like Christmas, summer holidays, or around major events, airlines see increased demand, which drives prices up. Even when airlines increase capacity by adding more flights or using larger planes, the high demand often outstrips supply, causing prices to surge.

5. Economic and External Factors

Broader economic factors such as inflation, currency fluctuations, and travel regulations also play a role in determining prices. Although these factors tend to have a more gradual impact, changes like increased travel demand after the COVID-19 pandemic or supply chain disruptions can result in sudden price hikes or reductions.

6. Competition

On routes where multiple airlines operate, competition helps lower prices, as carriers offer promotions and discounts to attract customers. Conversely, airlines have greater flexibility in setting higher prices on routes with little competition since travellers have fewer alternatives.

Why the unusual increase in prices this year on Christmas?

This year, there has been an unusual spike in Christmas travel prices, particularly for those looking to leave or enter Ireland. The cost of flights has nearly tripled compared to previous years. The reason? There is a lack of available seats to meet the surge in demand. In an interview, Ryanair CEO Michael O'Leary explained that the Irish Aviation Authority (IAA) did not provide additional flight slots at Irish airports for the holiday season. As a result, seat availability has not increased, even during this peak period, leading to soaring prices.

By contrast, Ryanair has responded to the high demand at Belfast Airport by adding 5,000 extra seats for Christmas. Still, in Ireland, the number of available seats remains the same!

The situation in Ireland, where Christmas flight prices have surged due to limited seat availability, could easily be replicated in other countries. As demand for holiday travel rises, the lack of additional airport flight slots can result in significantly higher prices.

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