Up, up, and away. That’s the way airfares are heading these days.

According to the US Bureau of Labor Statistics’ Consumer Price Index, fares rose nearly 43% from September 2021 to September 2022, and we anticipate they will continue to climb in 2023. By how much? You can find out in our Air Monitor 2023, an airfare forecast that was meticulously prepared by our Global Business Consulting (GBC) team.

Depending on where you’re traveling to and from, you may be paying significantly more for your ticket. While GBC predicts an economy ticket from Europe to the Middle East will only rise 2.0%, you can expect to pay 24.9% more for an economy seat from Australia to Asia.

As explored in the report, many factors are driving up prices.

First and foremost, demand is significantly higher than supply. The combination of surging demand from leisure travel and reduced capacity due to airline and airport labor shortages has put carriers in a strong position to raise fares and deploy more restrictive inventory management strategies.

There’s also the rising cost of fuel – which is the single largest operational expense for airlines, accounting for anywhere between 30% and 60% of expenditure in an average year. As of October 2022, jet fuel costs $155.77 per barrel, 64.7% more expensive than the year previously.

Fuel surcharges, extra fees that airlines impose on the base airfare, also are going up. Since March 2022, the fuel surcharges on a roundtrip business class ticket from New York to London have increased by $500 to $1,700. These surcharges – together with the various government, airport, and other miscellaneous fees – can add up to more than $2,000 for a round-trip business class ticket on the New York–London route.

The GBC team sees that carriers are also hardening their negotiation posture during contract renewals, insisting on “right-sizing” the contract based on 2022 spend and volume rather than 2019 as the baseline in negotiations, resulting in lower discounts.

From Amex GBT transactional data, there’s evidence that carriers are pushing travelers into higher fare inventory classes than they might have previously used, resulting in higher prices (check out the chart in the Air Monitor that demonstrates this point).

To dive in deeper into the trends influencing airfares in 2023 – and for a breakdown of our airfare predictions based on regions – download the Air Monitor 2023.