Airfare Prices post Covid19 - Up or Down?

1 reply

gavinbrightwell92

Member since 04 Oct 2019

Total posts 9

What do we all think will be the outcome of all this airfare wise?

Will airlines increase or decrease their airfares? Maybe it's cabin based? (Economy up and business down?)


Thoughts??

Ourmanin

Singapore Airlines - KrisFlyer

Member since 08 Jun 2018

Total posts 132

It's a very good question without an easy answer, I suspect that it will depend.

Firstly, I don't think any airline expects things to recover quickly post the end of this. The length of time before we see some sort of return to any sort of flying will also be important. The longer it goes on the more cost airlines will take out of the system and as that happens it will take longer to re-introduce (especially planes and staff, look at the decisions this week that BA has announced).

There is likely to be huge capacity reduction in the medium term, and those that do fly are most likely those that need to fly (or believe that they do). These are usually the passengers least sensitive to fare prices.

Corporate business travel will take a long ling time to recover, my thoughts on that have been stated elsewhere on this site, but when you factor in cost, employers duty of care and a likely reluctance of people to fly, I suspect they will take an age to recover to anything like pre virus levels.

My own thoughts would be that as we start to re-open then initially the massive reductions in capacity (possibly also exacerbated by the need to keep middle seats clear, etc.) and the types of passengers flying, means that seats are likely to be relatively expensive. As capacity returns we will then see reductions in pricing. Airlines will want to fly flights that are as full as (safely) possible and want those seats to be occupied, as far as possible, by people paying for them, not redeeming FF points.

The quicker capacity returns the quicker prices will reduce, but that is caveated by the huge implications for business travel and the likely reluctance in the short / medium term for long haul leisure travel to more exotic locations. If you look at the frequencies between, say SYD - SIN pre virus with close to ten flights a day, the demand simply won't be there for anything like that going forward.

I know there is a school of thought that there will be cheap flights and heaps of opportunities to redeem miles at good rates post this crisis, but I cannot see that. Airlines will not be able to run flights that aren't generating cash. There are still people banging on about Qantas running farewell flights for the 747 later this year. Anyone that thinks they are going to do that in this environment is a fantasist.


Last editedby Ourmanin at Apr 30, 2020, 08:37 PM.

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