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As traveling is becoming more safe countries become to open their borders again coming out of lockdown.

As a result of this, I started planning my next trip abroad but noticed that the flights are much more expensive than before.

Doing a simple London (any) to Moscow (any) search and playing with the dates to find the cheapest option, results in this flight:

image

Before, I would've expected to pay <£200 for that at school holiday time. That is not school holiday time, different airports, and different airlines. That flight leaves from London Luton when the <£200 was from London Heathrow which is even more expensive.

Why have flight prices rose so much? I would have expected it to be cheaper because people are hesitating to book flights.

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    You've chosen this moment to book travel again. Why doubt that many others are doing the same, thus driving up prices? Keep in mind that supply is much lower than it was pre-pandemic as airline schedules were cut drastically, so even a relatively small increase in demand could drive up prices significantly. – Nate Eldredge Jun 21 at 17:27
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  • @NateEldredge Quite a few people still think travel isn't safe but good point – Xnero Jun 21 at 17:28
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    @Darren I don’t think there are many airlines actually doing that, are there? – jcaron Jun 22 at 7:50
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    It could be the fact that all flights to Moscow keep getting cancelled every week. Russia still hasn't opened it's borders yet. You can book in advance (of course) but until Russia actually opens the borders, more and more people are waiting to get those seats. Competition might be fierce and the airlines will know it and take advantage. – AussieJoe Jun 23 at 4:02
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The flight companies charge as much as they think their customers are willing to pay.
Right now, after the borders are open again, many businesspeople need to travel asap, and often theres a lot of money on stake. Because of this, they're paying a lot to get to customers/partners/etc...
In these times, touristic travelers (who check prices more) are the minor part of the market, losing some of them will certainly worth it for the flight companies if they have others who are willing to pay those prices.

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One issue is that an airline can only fly a whole plane, even if most of the seats are empty. Before COVID, most airlines would cope with this by doing price discrimination based on purchase timing, round trip schedule, stopovers, etc. Hypothetically a flight might have 20% of its seats sold at high fares, 40% sold at medium fares, and 40% sold at low fares. In other words, many low fares were possible because the plane was already half-full of higher paying customers.

As of June 2020, many flights aren't even half-full at all, let alone half-full of higher paying customers. This is a financial disaster for airlines because it ruins the model described above. The medium-term outcome is unpredictable. The short-term outcome seems to be that airlines are cancelling many flights and focusing on selling higher fare tickets that might cover the costs of flights they do fly.

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