‘Endangered’: Grim warning for airlines

 

With airlines both in Australia and around the world parking the majority of their fleet, international travel remains well and truly off the table and are likely to remain that way well into the foreseeable future.

Experts have warned the concept of flying is set to look very different at the other side of the coronavirus pandemic, especially for those who typically travel at the pointy end of the plane.

 

Businesses forced to adapt to the coronavirus pandemic has resulted in uncertainty and fear hanging over the once booming travel industry with the lucrative dollars spent by business passengers set to having a lasting impact.

Unable to rely on businesses sending employees around the country and the globe for work-related trips - airlines will have to change tact and quickly.

But that could mean extra costs fall onto the holiday traveller.

Speaking to the Wall Street Journal, Robert Crandall - the former chief executive of American Airlines - says the future of air travel needs to pivot quickly if certain carriers want to remain in business.

"The airline industry is going to have to examine its business plan," Mr Crandall said.

"You are never going to see the volume of business travel that you've seen in the past. Everybody who depends on business travel is going to have to rethink their game plan."

Passengers are likely to incur higher airfare costs given business travel will be on the decline post-pandemic. Picture: Thomas Lohnes
Passengers are likely to incur higher airfare costs given business travel will be on the decline post-pandemic. Picture: Thomas Lohnes

David Tait, a founding architect of Richard Branson's Virgin Atlantic Airway agreed, saying the "business market" of air travel is "seriously endangered".

"Will it be as necessary to send road warriors out? I have serious doubts about that," he added.

Domestic travel saw an uptick in bookings in Australia last month, especially to Queensland, when borders reopened to most of the country on July 10.

But within weeks, a surge in cases in Victoria and growing number of coronavirus clusters in NSW saw Premier Annastacia Palaszczuk harden the border with major hot spots in Greater Sydney and the entire state of Victoria.

Earlier this week, the International Air Transport Association updated its projection of when travel will return to pre-COVID-19 levels: 2024, a year later than the airline group's previous forecast.

 

The economic devastation caused by the global pandemic - not just in Australia but in popular destinations around the world - may mean far fewer people can afford to travel, with holidays likely to take a greater slice of our disposable income.

Some experts fear the impact of the pandemic on airlines, with social distancing in place and a lack of business travellers, may translate to less leisure passengers flying abroad. As a result, this will make parts of international travel more expensive.

Speaking to the Washington Post, US-based travel Rick Steves said if some airlines continue to fly at a smaller capacity to be in line with social distancing measures, passengers will feel the pinch at the check out.

"If the airlines can only put half as many people on the plane, it's going to cost a whole double," Mr Steves said.

"I can afford it, but many travellers cannot. Then travel becomes an activity just for wealthy people."

The opening and closing of domestic borders is playing with consumer confidence when it comes to domestic travel.
The opening and closing of domestic borders is playing with consumer confidence when it comes to domestic travel.

When domestic borders begin to fall as coronavirus cases come down, Angus Kidman, Finder's travel guru said domestic airlines will lure back wary passengers with cheap fares - especially to popular family destinations like Queensland.

"There will be plenty of sub-$100 seats around, but I don't expect we'll see a return to the $19 fares that Tiger was offering a few years back. And as usual, flights on weekends won't be as cheap," he told news.com.au.

"Melbourne-Sydney is Australia's busiest route, but has a lot of business travel so doesn't usually see the biggest discounts. Once Queensland opens up its borders, I'd expect sub-$30 fares for the Gold Coast."

Mr Kidman said that while cheap fares will be welcomed by Aussie travellers, rebuilding the industry will be a slow process to get it back to pre-COVID levels.

"It will take a while to build travel confidence back up. So there might be an oversupply of seats in the first few months of flights," he said.

"Jetstar's first post-COVID sale featured very similar prices to those we'd seen prior to the pandemic. So bargain travel will definitely be possible, but with some limitations."

Originally published as 'Endangered': Grim warning for airlines


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