Will flight tickets get cheaper or expensive after coronavirus crisis ends?
Once the Corona Virus crisis ends- whenever it happens- and markets open up, would flight tickets get super cheap or will the get expensive? What do you think will happen?
Below are the reasons to believe airfare will Go UP once the crisis ends
1. Less competition: If several airlines go bankrupt unable to withstand the prolonged crisis, remaining players will not have any need to lower the prices. They can keep their prices high and still manage to find passengers
2. Desperate passengers: Once world opens up, lots of people will be desperate to travel- those locked up elsewhere and wanting to meet their parents/family, businessmen who need to close major deals and so on. While leisure travelers may take longer time to come to airport, airlines may attempt to milk these business/personal travelers who are very eager to travel.
3. Possibly long term advise to avoid non essential travel: Even after crisis ends, to ensure it doesn't reappear, governments world wide might advise people to continue maintaining social distance and avoid non essential travel for a much longer period of time. This means people will avoid travel if they can. Discounts may not entice leisure travelers if there is a fear of catching the virus.
4. Airlines may coordinate among themselves to avoid competition: Airlines will probably inter into mutual agreements to plan their networks such that they avoid direct competition, such that both airlines can benefit. This will keep the prices high.
Reasons to believe airfare will Go Down:
1. Airlines desperate for cash: When survival is at stake, airlines are known to launch crazy low fares. Every dollar counts, so even if a fare is not profitable, airlines will try to offer low fares and pocket as much as cash as they can so that they get some cash for day to day operations.
2. Govt boost to tourism: In order to help the totally grounded travel and tourism industry, governments worldwide may launch several incentive programs, including bail outs, reduced taxes, easy visa rules and other programs to encourage people to come out and travel. If airlines get government lifelines they may be bit generous in setting fares lower.
3. People have less cash: Middle class will have lot less savings left and travel will not be their priority. If airlines need to entice them to travel, they need to be tempted with really low fares.
At this moment it is too early to predict. Outcome could be different depending on how long the Corona Virus crisis lasts (3 months, 6 months, 12?). Not all airlines and all parts of the world may see same trend. Also opportunities come to people who are flexible. Some airlines and some destinations will definitely be super cheap. What do you think will happen?
1. Less competition: If several airlines go bankrupt unable to withstand the prolonged crisis, remaining players will not have any need to lower the prices. They can keep their prices high and still manage to find passengers
2. Desperate passengers: Once world opens up, lots of people will be desperate to travel- those locked up elsewhere and wanting to meet their parents/family, businessmen who need to close major deals and so on. While leisure travelers may take longer time to come to airport, airlines may attempt to milk these business/personal travelers who are very eager to travel.
3. Possibly long term advise to avoid non essential travel: Even after crisis ends, to ensure it doesn't reappear, governments world wide might advise people to continue maintaining social distance and avoid non essential travel for a much longer period of time. This means people will avoid travel if they can. Discounts may not entice leisure travelers if there is a fear of catching the virus.
4. Airlines may coordinate among themselves to avoid competition: Airlines will probably inter into mutual agreements to plan their networks such that they avoid direct competition, such that both airlines can benefit. This will keep the prices high.
Reasons to believe airfare will Go Down:
1. Airlines desperate for cash: When survival is at stake, airlines are known to launch crazy low fares. Every dollar counts, so even if a fare is not profitable, airlines will try to offer low fares and pocket as much as cash as they can so that they get some cash for day to day operations.
2. Govt boost to tourism: In order to help the totally grounded travel and tourism industry, governments worldwide may launch several incentive programs, including bail outs, reduced taxes, easy visa rules and other programs to encourage people to come out and travel. If airlines get government lifelines they may be bit generous in setting fares lower.
3. People have less cash: Middle class will have lot less savings left and travel will not be their priority. If airlines need to entice them to travel, they need to be tempted with really low fares.
At this moment it is too early to predict. Outcome could be different depending on how long the Corona Virus crisis lasts (3 months, 6 months, 12?). Not all airlines and all parts of the world may see same trend. Also opportunities come to people who are flexible. Some airlines and some destinations will definitely be super cheap. What do you think will happen?
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