Airfares will rise again in 2025 as carriers take on higher fuel costs

Early projections for the new year reveal that airfares are poised to rise globally. Experts attribute this trend to a confluence of economic factors, including rising fuel costs, inflationary pressures, and sustained demand for travel.

With airlines adjusting to new economic realities and evolving traveler expectations, understanding these shifts is crucial for industry stakeholders and consumers.

A report by the Global Business Travel Association predicts airfare increases between 2% and 14% across most international routes. This rise follows similar trends observed in 2024, where ticket prices climbed due to record demand during peak travel seasons. The Asia-Pacific, the Middle East, and North America are among the regions expected to experience the most significant fare hikes.

Fuel prices, which account for 20%-30% of operating costs for airlines, are a major driver of these increases. While oil prices have fluctuated, projections for 2025 suggest higher average costs compared to pre-2020 levels. Compounding this, inflation and labor shortages in key markets are inflating operational expenses for airlines globally.

Middle East and Gulf outlook

The Middle East, a critical hub for international air travel, mirrors global trends. Carriers based in the region - including Emirates, Qatar Airways, and Etihad Airways - have indicated modest fare increases for long-haul flights in 2025.

These airlines are also heavily investing in fleet expansions and services, which could offset rising costs with enhanced travel experiences.

UAE-based carriers report that Premium cabin bookings have surged by 18% year-over-year, underscoring a shift toward high-value travel.

Budget travellers: Challenges and opportunities

Low-cost carriers are also adjusting fares in response to market dynamics. Air Arabia and flydubai have kept price increases lower than their full-service counterparts but warn of potential changes if fuel prices rise sharply.

Travellers seeking to mitigate costs can explore alternative booking strategies, such as leveraging flight comparison tools, booking during ‘shoulder seasons’ (periods just before or after peak travel times), and considering secondary airports for better deals.

Flexibility in travel dates, which remains a key strategy, can save consumers up to 25% on airfare, according to Hopper's 2024 report.

Loyalty programs

Airline loyalty programs are becoming increasingly important for frequent travelers navigating rising fares. Reports indicate a 12% uptick in the redemption of points and miles for flights in 2024, a trend likely to continue in 2025.

However, many airlines have also adjusted redemption thresholds, requiring more points per ticket, effectively reducing their value.

Travelers are advised to redeem points sooner rather than later, given potential devaluations in loyalty programs.

Rise of Sustainable Travel

Environmental concerns are reshaping the aviation industry, influencing both pricing and consumer behavior. Airlines are investing in Sustainable Aviation Fuel (SAF), fleet upgrades, and carbon-offset programs to meet global climate goals. However, these investments come at a cost, which is gradually being passed on to consumers.

Data from Skyscanner indicates that 42% of travelers are willing to pay a premium for eco-friendly travel options. In 2025, this trend may become more pronounced, with airlines offering ‘green’ ticket tiers and transparency about emissions.

What travellers can do

With airfares expected to climb, travelers can adopt several strategies to get the best prices:

While airfares in 2025 are unlikely to return to pre-2020 levels, the travel industry’s resilience and innovation remain strong.

As airlines adapt to shifting economic and environmental demands, the intersection of pricing, sustainability, and customer experience will define the future of air travel. Whether through loyalty programs, smarter booking strategies, or embracing new travel trends, consumers have multiple avenues to make the most of their journeys.

Worried about travel bills? Easier payment schedules are opening up for UAE travelers, with the money management platform Sav aligning with Travelwings.com, an online travel agency. They will push the ‘save now pay later’ concept, which would help fliers avoid the ‘pitfalls of high interest credit’. This collaboration allows Sav users earn up to 7% value-back on travel bookings with Travelwings.com when they achieve their travel savings goals. The UAE has seen nearly 40% rise over the past decade in individuals overleveraged on credit, with some paying interest rates of up to 30% on missed payments. Sav’s model encourages users to save in advance toward travel goals and enjoy debt-free vacations.