What Are the Reasons for the Price Increase of Airline Tickets to Russia?

The State Commission for the Protection of Economic Competition of Armenia has conducted an investigation into the price increases of airline tickets for flights between the Republic of Armenia and the Russian Federation, prompted by media reports and complaints received through a hot line.

The study revealed that the increase in ticket prices is primarily due to economic factors analyzed through digital automated systems used by major foreign airline companies. Moreover, there is significant demand for cheaper tickets from the Armenian carrier ‘Armenia Airline’ LLC, which has led to an increase in ticket sales.

According to information provided by ‘Armenia Airline’ LLC, a resident of Armenia, the demand for tickets sharply increased following the reopening of air borders with the Russian Federation for citizens of Armenia on February 1, 2021. Consequently, the low-priced tickets available through the electronic sales system, which were sorted in ascending order, were nearly completely sold out before February 1, leaving only business class tickets available for sale.

As for Russian resident companies, it is important to note that supervision of their activities is outside the powers granted to the Commission by law and falls under the jurisdiction of the Eurasian Economic Commission. Nevertheless, the Commission has previously dealt with the phenomenon of increasing airline ticket prices and has attempted to clarify the mechanisms behind ticket pricing and the reasons for price increases through its partners at the Eurasian Economic Commission.

Within the framework of the EEC study, it was noted that airlines utilize revenue management software applications to effectively implement ticket price subcategories. Airlines independently set tariff groups within which multiple subcategories can be established. Revenue management programs allow for the distribution of aircraft seats for flights along selected routes based on fare classes, with pricing determined by various factors such as the flight’s direction.

Furthermore, carriers use programs for bookings, sales, seat allocation, electronic ticket registration, baggage check-in, and more. These programs operate in an interconnected manner, transferring necessary data from one to another. It should be emphasized that these applications are automated and nearly devoid of human influence.