The cost of flights is likely to increase after lockdown - here’s why
As lockdown restrictions begin to ease in some areas of the UK, airlines are motivated to get their planes back into the skies.
However, one consequence of the ongoing coronavirus pandemic could be a huge increase in the cost of air travel, according to the International Air Transport Association (IATA).
Why will airfare increase?
As travel restrictions lift in the future, passenger demand is likely to remain low, which would usually see a pressure put on airlines to reduce the costs of their flights.
However, if companies are forced to maintain certain social distancing measures, such as keeping the middle seat free between passengers, carriers will need to raise their airfares quite significantly.
In a report, called Covid-19: Cost of air travel once restrictions start to life, chief economist Brain Pearce writes that “to break even while selling fewer seats, airlines would need to increase fares”.
It is estimated that the fare increase would “be between 43-54 per cent”.
Pearce said, “It's tricky to understand how many airlines will be able to operate profitably. It will be a much smaller industry.”
Airlines have already been seen struggling with the dip in passenger numbers.
Virgin Atlantic said that more than 3,000 jobs would be cut, and it’s operations at Gatwick Airport will be ended as a direct result of the coronavirus pandemic.
British Airways has also chosen to make 12,000 staff members redundant, stating that the government job retention scheme would only keep BA afloat for a matter of days.
A total of 3,000 jobs at Ryanair - 15 per cent of its workforce - are also set to be cut, as the company struggles to restructure under the ongoing coronavirus pandemic. The majority of these roles are said to have belonged to pilots and cabin crew.
In April, Virgin Australia went into voluntary administration, with analysts predicting that other airlines will follow.