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When the emergency of coronavirus end or start to go down, what will happen to him cost of air tickets? Will they go up or down?
Always attending to and responding to the many questions that have been asked about the future of aviation once this whole situation is over, I will try to respond in this post to one that caught my attention..
Post coronavirus, what will happen to the cost of airfare?
More than saying what will happen, This is what logically should happen with the prices that existed in the market before the global emergency.
I want to emphasize that these words that come are not a guarantee or much less a concrete and confirmed fact., rather it is an estimate, forecast or analysis of the current situation and what would come in the future.
What can happen, let's divide it into 3 possible panoramas:
Panorama 1
- Everything remains the same: The prices that we knew are maintained in search of returning to the known profitability that the airlines knew until before the emergency. In this scenario we could see a similar number of passengers to those we saw before in a few months as everything returns to normal..
Panorama 2
- Prices rise: taking into account that losses of more than 130 billion dollars for the industry, Airlines could make the decision to increase their prices with the aim of recovering income and getting ahead, taking advantage of the need that people will have to fly again. In this scenario there would be fewer passengers, but paying more.
Panorama 3
- Prices go down (my forecast): a weakened industry, distrust of users about getting on a plane for fear of spreading the disease, will make planes emptier than expected, Given this scenario, airlines will be forced to reduce the costs of air tickets and in turn, lower your profit margins, all with the aim of stimulating the market and regaining people's trust.
Whatever the scenario, The situation will be critical for the vast majority of airlines and both governments, As an economy that revolves around the industry, they must do their part so that we can all fly again.
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I bet on the panorama 2, It is true that optimistic opinions speak of economic recovery, In the same way we must be realistic, of what panorama 3 You can talk when there are airlines covered by the bankruptcy decree, which leads to layoffs of your employees, can anyone operate with it 30% of his ability ???
Personally I doubt it, there are many costs involved, in addition to the legislation of each country and operating costs, less passengers less revenue, less money to pay creditors, a globally battered economy, who sees their income reduced by increasing their cost of living due to biosafety regulations, I respect the criteria, but there is no one blinder than the one who does not want to see…!!!
Equal, I'm leaning towards the third part, in which airlines would have to lower fares or, at least stay at pre-pandemic rates.
I agree, third scenario, they will necessarily have to lower the price of air tickets, although with the danger that passengers will not respond.… and small airlines are on the verge of bankruptcy.
I agree, third scenario, they will necessarily have to lower the price of air tickets, although with the danger that passengers will not respond.… and small airlines are on the verge of bankruptcy
I lean towards the panorama 2 or at best panorama 1:
Passengers will have fewer options (routes and airlines) and higher prices.
The crisis will cause companies to reduce their fleets (it's already happening), as well as many unprofitable routes. Some companies (the weakest) will disappear, and will be absorbed by other companies, reducing competition. Solid airline groups will have control of the market.
further, for economy of scale, as there are fewer planes in the air, There will be fixed costs in the airlines that will affect the price of tickets.
In the case of Colombia, in addition to an increase in flight prices, We will also be affected by the exchange rate in the medium and short term..
All this already happened in the 9/11.
I agree with your comments.
what happened in 9/11?
you mean September 2011? the twin towers
very good post, In the same way I lean towards the panorama 3 since the industry will need to stay afloat by lowering its costs and regaining confidence in travelers. I think it is a good time to make alliances with ministries or tourism secretaries to offer packages so that everyone in the tourism chain benefits.. As well as offering travelers discount vouchers to family members for frequent routes and/or trips.. The most important thing will be the innovation in marketing that the airlines will propose.
Key what you say, ministries or tourism chambers will be key to recovery.