Post-pandemic social distancing could spike airline ticket prices, IATA says

The International Air Transport Association (IATA) says that airline ticket prices could potentially soar in a post-COVID-19 world.

During a media briefing held on Apr. 14th, IATA’s director general and chief executive, Alexandre de Juniac, warned that once the aviation world opens up again, strict new rules will be in effect to reduce the global spread of COVID-19, but ultimately, passengers will pay the price.

de Juniac introduced two new terms that those who work in the aviation industry should take note of: “de-densification,” which refers to reducing passenger numbers on any given aircraft, and “neutralising,” which mandates that certain seats must remain unoccupied, and are otherwise not for sale.

As a result, ticket prices may go up as less seats become available.

The Independent reports that if an airline is expected to slice one third of its passenger numbers, then fares will rise by 50 per cent as a result.

WestJet is one Canadian carrier that has already committed to the neutralization process, after announcing that from now until May 4th, 2020, the middle seat on its Boeing 737s and 787s will be unavailable to book.

“We have never seen a downturn this deep before,” de Juniac said. “In our latest scenario, full year passenger revenues plummet 55 per cent compared to 2019, while traffic falls 48 per cent. In other words, half our business disappears. That’s catastrophic.”

The future of flying

Consumer demand will ultimately determine the outcome of ticket prices, as de Juniac notes that passengers will shy away from flying unless their confidence is fully restored.

(Confidence in the state of the economy, as well as the guarantee that their travel won’t be impacted by quarantine restrictions).

“Individual country decisions cannot enable the restoration of international air services when other markets remain closed,” de Juniac said.

Until connector markets are fully restored, travellers could see higher airfares, as certain flights could be harder to sync harmoniously, without having stopovers or connections.

According to de Juniac, countries that have successfully stopped the spread within their own borders, like China and South Korea, “are now doubling down on international travel restrictions because they don’t want to risk importing a second outbreak.”

“Governments re-opening their economies must have confidence that the disease is also under control in the countries they do business with,” de Juniac noted. “Otherwise they are not going to make travel easy or convenient.”

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