Low cost air travel could rise by 50%
According to the information provided by the Ministry of Transport, Mobility and Urban Agenda, the European Commission will announce on Wednesday the standard guidelines for airlines to be able to fly again without restrictions. They have made it clear – to achieve profitability with fewer passengers- airlines would have to increase ticket prices substantially.
The International Air Transport Association speculate that initially cheaper prices may be available to encourage a return to traveling, but then as business economics kick in, prices may rise by as much as 50%.
Airlines first priority is to get their fleets back in the air, but initial demand is estimated to be low which may encourage lower pricing. However, with new guidelines suggested such as keeping some form of social distancing, for example leaving the middle seats empty, profitability will suffer. Prices will have to be increased.
RyanAirs Michael O’Leary said “keeping middle seats empty was idiotic”.
Face masks are expected to be mandatory.
Virgin Atlantic are expected to cut 3000 jobs and possibly remove Gatwick from it’s schedule. RyanAir have stated refunds could easily take up to six months to be repaid.
The International Air Transport Association estimates only 4 of the 122 airlines it has monitored may be able to break even under these conditions. Just last month, Virgin Australia entered into voluntary administration. Experts fear other airlines will follow if the travel restrictions stay in force for very much longer.
Under these circumstances experts are calculating that rises in fare prices is inevitable. It remains to see how this industry will recover.
Brian Pearce IATA’s Economist stated “It’s tricky to understand how many airlines will be able to operate profitably. It will be a much smaller industry. Air travel is not expected to resume to normal levels until 2021”