The Guardian Tue 21 Apr 2020
Iata says airlines will have to raise prices 50% or go bust if Covid-19 rules are enforced
The days of cheap air travel will be over if airlines are forced to introduce physical distancing measures on planes because of the Covid-19 pandemic, the industry has warned.
Alexandre de Juniac, the director general of the International Air Transport Association (Iata), said that if governments ordered airlines to adopt physical distancing onboard aircraft, at least a third of seats would remain empty and airlines would have to raise their ticket prices by at least 50% or go bust.
“Either you fly at the same price, selling the ticket at the same average price as before, and you lose enormous amounts of money so it’s impossible to fly for any airline, particularly low cost; or you increase ticket prices by at least 50% and you are able to fly with a minimum profit. So it means that if social distancing is imposed, cheap travel is over.”
Iata said domestic air traffic had slumped 70% since early January because of the pandemic and warned that any global recovery was likely to be slow. While domestic routes will open sooner than long-haul, weak consumer confidence amid recession fears will undermine a quick recovery, said Brian Pearce, Iata’s chief economist. Vietnam plans to restart all domestic flights from Thursday.
Pearce pointed to China, where air travel bounced back initially when domestic flights resumed in mid-February, but said the recovery had since stalled with the number of domestic flights at just over 40% of pre-pandemic levels. In Australia, domestic flights are 10% of pre-crisis levels even though new Covid-19 infections are close to zero.
Iata is conducting regional summits with governments this week and called for confidence-boosting measures. While several European countries are starting to ease national lockdowns, “an immediate rebound from the catastrophic fall in passenger demand appears unlikely”, said de Juniac.
The aviation body expects 2020 global passenger revenues to more than halve from last year, a loss of $314bn (£255bn).