The Effect Of COVID-19 On Ticket Prices In The Future

COVID-19 has had a major impact on airlines globally, reshaping the industry for years to come. However, as many start to look beyond the pandemic, what effect will it have on ticket prices? Will we see prices go up or down? Is now a good time to begin booking tickets? Let’s find out.

This article will focus on ticket pricing after the pandemic (once we have a working vaccine that has been distributed and used globally). While minor variations can be expected on a daily basis, we could see more permanent shifts in ticket prices on certain routes and cabins.

Prepare for a price war

Imagine the world a year from now, most of the global population has received a vaccine, border controls are being eased, and everyone is itching to travel. This is the precise scenario airlines, especially low-cost ones, globally are planning (and hoping) for. To remain competitive in the face of demand, carriers are planning to quickly drop their prices to attract passengers.

We saw a small example of this during the summer season in Europe, with Ryanair CEO Michael O’Leary, speaking to FlightGlobal, saying that his airline will drop prices drastically to stimulate demand, a sentiment echoed by other airlines too. However, we could see a much larger price war in the post-COVID market, with all airlines suddenly competing for passengers.

A price war would be beneficial to passengers, incentivizing them to start flying quickly and boosting the struggling tourism economy. However, the price war will only last as long as demand remains under pre-COVID levels, which might not be too long for carriers like Ryanair. Additionally, routes with lesser competition will likely see prices go up with demand as airlines can once again charge a premium.

Premium cabins to get cheaper

Another effect of COVID-19 could be that demand for business travel might take a while to recover (if it ever does). Without business travelers willing to shell out thousands of dollars for premium cabins, airlines could start selling tickets at lower prices. This would suddenly mean cheaper business and first class fares, a reality airlines have begun preparing for.

To push leisure travelers toward business class, airlines have begun offering “unbundled” tickets, which do not offer all the usual perks. Qatar Airways became one of the first major carriers (along with Emirates and Lufthansa on some routes) to implement this idea. It wouldn’t be surprising to see other airlines to follow Qatar’s example and offer cheaper fares.

It should be noted that while airlines are offering cheaper business class tickets, don’t expect rock-bottom fares. Airlines still need to make large amounts of revenue from the business class cabin to return to profitability. For truly low-cost premium cabin tickets, airlines will have to adopt ZIPAIR’s new concept.

Is it time to book?

These developments in airline pricing do look positive, with cheaper fares and more affordable premium cabins. Airlines are also offering significant flexibility to passengers for the next few months, allowing you to change dates freely. However, there are still drawbacks to going ahead and booking tickets.

For starters, we still have no idea when a COVID-19 vaccine will be widely available enough for travel to restart. This makes booking tickets right now quite risky, with date changes still costing the fare difference. Additionally, it might be better to hold out for better fare deals in the coming months as the recovery picks up.

Ticket prices, a subtle art in the airline industry, will be affected by COVID-19 even after it subsides. However, this impact could be helpful to passengers in the short-term and kickstart travel once again.

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