Air fares should fall when flights restart then again rise by a minimum of 50%, warns an airline industry body.
Airlines are keen to induce planes back within the skies quickly which may lead to over-capacity, says the International Air Transport Association (Iata).
With passenger demand likely to stay low this could put pressure on carriers to scale back the price of flights.
But if airlines are forced to maintain middle seats free they’ll must raise air fares significantly.
Under current social distancing proposals, airlines could also be required to maintain middle seats free which might have a significant impact on their profitability, as they’d be forced to fly with fewer passengers. Michael O’Leary, the boss of Ryanair, said keeping middle seats empty was “idiotic”.
Iata estimates that only four of the 122 airlines it sampled would be ready to hit under these conditions, resulting in consolidation within the industry. Raising fares is “inevitable” for airline companies to stay commercially feasible.
Most carriers are already battling the extreme decrease in passenger numbers with the overwhelming majority of their planes grounded.
On Tuesday, Virgin Atlantic said it might cut around 3,000 jobs and end its operations at Gatwick Airport. Last month, Virgin Australia went into voluntary administration and analysts fear other airlines will follow.
“It’s tricky to understand how many airlines will be able to operate profitably. It will be a much smaller industry,” said Brian Pearce, Iata’s chief economist, talking about the onboard social distancing proposals.
His team argues that social distancing through vacant middle seats isn’t any assurance against the coronavirus spreading on planes. Instead, Iata supports passengers to wear face masks to ensure safe flying.
The ray of hope for passengers is that they might see low-priced tariff once flights resume as airline companies try to stimulate demand.
Carriers will only be able to increase ticket price once passenger numbers recover, but this can only be by 2021 at the earliest, estimates Iata.
