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Will Boeing groundings make flight tickets more pricey? Experts say it’s possible

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The groundings of Boeing 737 MAX 8 planes around the world have led to concerns that affected airlines may pass some of the costs on to customers — meaning higher air ticket prices.

Several airlines, including Air Canada and WestJet, have had to cancel flights and rearrange schedules in light of the ban.

READ MORE: Air Canada to suspend Boeing 737 MAX planes until ‘at least’ July, some flights affected

Among Canadian airlines, Air Canada has the highest number of 737 MAX 8 planes. Its 24 MAX 8s account for 12 per cent of its 191-plane fleet, and the airline has said it will keep those jets grounded until at least July 1.

The possibility of higher prices has been brought up by some aviation experts, including Tae Hoon Oum, a professor at the University of British Columbia’s Sauder School of Business.

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“Prices will go up. They’ve already started to go up,” he told Global News.

WATCH (March 24): Grounding of MAX 8 planes will lead to more expensive flights this summer

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Grounding of MAX 8 planes will lead to more expensive flights this summer – Mar 24, 2019

He added that customers may not even notice the price difference at first, because flight prices tend to fluctuate anyway.

“A consumer may not notice the price difference, unless they checked the price a month ago and check it now and see that it has gone up.”

Oum said airlines will rent and lease planes to mitigate some of the damage.

But he expects Canadian travellers to see price increases from Air Canada and WestJet, and also experience trouble from American airlines.

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“American carriers — United, American and Delta — all of them come to Canada from the United States,” Oum said, explaining that the Boeing groundings would affect an estimated 10,000 seats daily.

The only way for people to avoid the rising fares will be to either postpone their vacation plans or rebook with another airline that has fewer MAX 8s in their fleet, Oum said.

WATCH (March 22): Boeing races to reassure as first airline asks to cancel MAX 8 order

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Gilbert Ott, who runs a travel website called GodSaveThePoints.com, also noted that prices may rise more for airlines with a higher percentage of the planes in their fleets.

“It’s going to really affect airlines like Norwegian that had a lot of those airplanes in their fleet,” he said.

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Ott noted that’s particularly interesting because it’s Norwegian Air and other similar low-cost airlines that have been pushing ticket prices down.

“If they’re unable to continue or have to cut their schedules and they pull out of certain airports, then it’s going to open up traditional airlines to raise prices again,” he said.

READ MORE: B.C. aviation expert says Boeing MAX 8 grounding will lead to price spikes for summer travel season

Oslo-based Norwegian Air has 18 MAX jets in its 163-aircraft fleet. The airline is expected to take delivery of dozens more of the MAX in coming years, raising the overall number to more than 70 by year-end 2021, according to recent company announcements.

Idle planes will also add to pressures on the airline, which is taking losses amid intense competition at a time when several smaller European competitors have gone out of business.

Ott said a similar situation applies to Southwest Airlines in the U.S., which is the largest operator of the MAX in the world.

WATCH: Norwegian Air to postpone sales after grounding 737 MAX 8

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Norwegian Air to postpone sales after grounding 737 MAX – Mar 25, 2019

Southwest Airlines has cut its financial outlook for the year after being forced to pull its new fleet of 34 Boeing 737 MAX planes out of service.

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But Ott also cautioned not to worry just yet, and that any price increase won’t occur for several months. He said if consumers booking flights for the summer are noticing higher prices right now, it’s likely due to the “standard effects” of peak travel season.

READ MORE: Calgary family out thousands of dollars after vacation is delayed due to Boeing 737 MAX 8 grounding

Ott also noted that he doesn’t expect a significant price increase to hit Air Canada, WestJet or other “legacy airlines” over the Boeing groundings because they have found “creative” solutions in handling the shortage.

“They’ve done really clever things like upgrading or upgauging some of their flights,” Ott said, explaining that they replaced 737 MAX jets with bigger ones.

Ott noted that airlines can turn to plane leasing companies or form partnerships with other carriers.

His advice: “Don’t panic just yet.”

— With files from Global News reporter Sean Boynton and Reuters

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