Does the exchange rate affect the cost of an air ticket?
Recently, the euro and dollar exchange rates have significantly increased against the ruble. Will this affect the cost of air tickets?
Russian Airlines
Most Russian carriers lease their aircraft, and lease payments are made in foreign currency. Passengers, however, pay for tickets in rubles. Let's consider a small example. Cost of a new Boing 737 - from $76,000,000 Monthly lease payment - 1% or 760,000
- At an exchange rate of $1 - 30 rubles, this is - 22,800,000 rubles.
- At an exchange rate of $1 - 35 rubles, this is -26,600,000 rubles.
Difference - 3,800,000 rubles. This is an approximate calculation for just one aircraft; an airline can have dozens of them, as well as foreign currency loans. Naturally, such an unplanned expense must be covered by something, and that something will be air tickets. Of course, the airline will not change its prices on the same day the exchange rate changes, but if the trend continues for a prolonged period, they will simply have no choice.
Foreign Airlines
Changes in the ruble exchange rate against the euro also affect the cost of air tickets for foreign carriers. The fact is that airlines upload their fares to GDS (Global Distribution System) in euros or dollars. In Russia, payments are usually made in rubles, which means prices must be converted to rubles, but at what exchange rate? All airlines and agencies use the GDS exchange rate in their calculations. In accordance with IATA resolution, it is formed based on the Russian Central Bank's exchange rate following Tuesday's trading for Wednesday, rounded up to 50 kopecks. And again, let's return to examples.. Air ticket price 100 euros
- Exchange rate 1 euro - 42 rubles
- Air ticket price in rubles - 4200
- Exchange rate 1 euro - 51 rubles
- Air ticket price in rubles - 5100
Difference - 900 rubles. And this is for a very cheap air ticket.
How can you outsmart the system here?
There is one way. As we wrote above, the new exchange rate is set on Wednesday, but it will be known on Tuesday. Therefore, if on Tuesday you see that the euro exchange rate will increase based on trading results, then buy your air ticket – tomorrow it will be more expensive. If the situation is the opposite, then wait and buy on Wednesday when it becomes a little cheaper.
