Airfares to go up as oil prices rise, but travel demand will dampen: IATA

Airfares to go up as oil prices rise, but travel demand will dampen: IATA

Doha: Airline industry body IATA (International Air Transport Association) said the pent-up travel demand, which has been driving passenger traffic for most airlines, will start to wane in 2023 due to high rates of inflation. “The traveling deficit is so great that people are willing to pay a higher price to satisfy that,” said Marie Thomsen, IATA’s Chief Economist, during the IATA AGM in Doha. “Into 2023, this will definitely start waning… (as) high levels of inflation (persist).” Thomsen said that the high precautionary savings accumulated by consumers during the crisis may be depleted at some point due to higher costs and travel-related expenses. But, demand will continue to be supported by falling unemployment rates in the US and other developed economies. “Very few economists thought that that recovery would happen so swiftly, and while that comes with its own set of problems, it still means that people are still earning,” said Thomsen. “As long as people are earning, I am not concerned in the absolute about the higher rates of inflation.” Thomsen said that the global scenario will turn more negative when unemployment rates start rising. “That depends on what will happen in China.” The South Asian country, which