BANGKOK, THAILAND – The war in Iran sent long-haul travel prices to dramatic new highs, leaving trips to Asia with European airlines costing a small fortune and Thailand’s hotel industry fearing empty beaches.
Lufthansa demands record prices for Asia routes
A return ticket from Munich to Bangkok in economy class currently cost more than 3,200 euros. Lufthansa charged fares that travelers otherwise associated only with business class. Google data documented this steep jump in prices.
Despite this, people still booked the expensive tickets. Compared with the period before the outbreak of war in the Middle East, airlines added around 160 percent to the regular fare. There was little sign that this price rally would end soon.
Airlines hit Easter holidaymakers hard
Just in time for the Easter holidays, carriers reached even deeper into their customers’ pockets. Even during this already popular travel period, the ticket price stayed at the unusually high level of around 3,200 euros.
As a result, the surcharge for this season exploded. It stood a hefty 225 percent above the amounts travelers had calculated for this period before the conflict. For many families, this tore deep holes in their budgets.
Gulf carriers cancel flights en masse
Behind these shock prices was massive disruption at the major hubs in the Middle East. Military clashes almost completely shut down normal operations in the Gulf states.
At the same time, the most important providers for Asia tourism dropped out. Emirates, Etihad and Qatar Airways had previously transported a large share of passengers heading east. Now they regularly cancelled routes to Asia.
European airlines exploit the power vacuum
With strong competition from the Gulf absent, European airlines rubbed their hands. They felt barely any real rivalry on the lucrative long-haul routes to Southeast Asia.
As a result, Lufthansa and its peers effectively dictated prices. When supply shrank and customer demand held steady, fares inevitably shot up. Travelers found hardly any cheaper alternatives.
Thailand fears rapid tourism slump
On the ground in Southeast Asia, alarm bells were ringing loudly. Thai hoteliers and beach vendors already noticed significantly fewer guests from Europe, and the streets slowly emptied.
The country lived almost entirely from its foreign visitors. If holidaymakers stayed away permanently because of the exorbitant airfares, a deep crisis loomed that acutely threatened hundreds of thousands of jobs.
Are airlines cashing in on a crisis?
The war in the Middle East reshuffled the global travel market. While Asian holiday paradises fought for their survival, European carriers filled their coffers.
The situation raised a pointed question: were corporations shamelessly profiting from a disaster, or was this simply the harsh logic of the free market at work?