Dumb Airlines not thinking

[ethernet]

There will be huge demand for flights when the ban gets lifted. A few budget airlines are offering free flight changes(but with difference clauses). Scoot had a lame offer, and FF points - don't get me started. Jetstar could beat the rush by offering free memberships -but no. Were it me I would have a site indicating destination and price range so the moment its lifted a tailored email hits my inbox. These airline revenue management engines are clearly broken post Corona - yet there is no advance thinking.

 

[jb747]

There will be huge demand for flights when the ban gets lifted.

The airlines that emerge after all of this will be a fraction of their previous size. My guess is that about half of all seats will have disappeared. Flying will not come back evenly, but will appear route by route. Many passengers will be very wary of travel, and will give it a year or two to settle before the venture forth again.

So, at the end of all of this, I expect availability to be much, much lower. Prices will reflect that. Award flights...yeh.

 

[MEL_Traveller]

Many passengers will be very wary of travel, and will give it a year or two to settle before the venture forth again.

i think once we have a vaccine the desire to travel could rebound pretty quick. I'd be on a plane the day after my shot!

Whether businesses have the cash to send execs in business class, or whether the leisure traveller has money to fly for a holiday will be the question.

 

[eastwest101]

When this is over, the businesses that remain will need to start flying people around as well, maybe the airlines should offer some non-payment flight options (or a discount maybe) online to judge where the demand is returning and on which routes? That would make sense to me. Sure some business travel is discretionary but there is a massive workforce of stood-down FIFO workers who need to get back to work, once all these travel restrictions are removed. If they let the yield managers run riot and jack up fares to the max then businesses will find permanent solutions to replace flying people by high charging airlines, that might include multiple charter operators shared between customers who might compete for seats (think customers like Rio and BHP co-operating on charter flights) and these solutions will be permanent and will destroy demand, not really a smart strategy to return to the skies. You could even see "rogue" state governments offering sweetheart deals to get future operators to return to their states and locking out competitors so they had better be agile and ready for anything!

After all - this is the age of big data - why not use it to gauge interest in future returning flights? Lots of different ways to gamify it or leverage off Frequent Flyer system to help them out.

 

[flyer89]

We have a honeymoon to Europe later part of this year. So come hell or high water we are going(if we are allowed). On another note I’ve noticed Air BnB and hotel prices haven’t really taken a dive in most of the cities we are traveling too. I’ve even seen a few Air BnB prices go up.

 

[samh004]

The airlines that emerge after all of this will be a fraction of their previous size.

You think this will be true of the ME3 as well, or will they be the ones flooding the market with seats and screwing everyone else?

 

[dajop]

You think this will be true of the ME3 as well, or will they be the ones flooding the market with seats and screwing everyone else?

I know the ME3 get lumped in together, but QR will almost be certainly doing so, surely? Not sure about EK, they seem to be more disciplined (anyone who continues with 2-3-2 J in todays long haul market does have at least one eye on financial return).

 

[MEL_Traveller]

... maybe the airlines should offer some non-payment flight options (or a discount maybe) online to judge where the demand is returning and on which routes?

oo! I have an idea! Maybe I can say to Qantas/Virgin/Jetstar... let me fly now and 'I'll give you a voucher' which you can redeem for cash from me at some time in the next 12 months. The final value of that voucher will be what I decide, and it may or may not bear any correlation to the value of the travel undertaken.

Now that sounds fair

 

[ja1]

We have a honeymoon to Europe later part of this year. So come hell or high water we are going(if we are allowed). On another note I’ve noticed Air BnB and hotel prices haven’t really taken a dive in most of the cities we are traveling too. I’ve even seen a few Air BnB prices go up.

This is so cute (in a rather macabre humour) sort of way. That you are optimistic enough to think you want to be in Europe or that you think there's a chance of being 'allowed' or that you think airlines are still flying

I admire the optimism but fear it may be misplaced.

Is the idea of the honeymoon and overseas travel while all this is going on part of some romantic pact to die as young (but presumably requited) lovers?

 

[Archipelago]

It's interesting how everyone views the current situation. Some view it as meaning that bargain travel will be available once travel restrictions ease - but there is something else to be aware of.
As jb747 said, airlines and their seat availability will be significantly reduced.

For my two cents worth - this is the key factor

Reduction of capacity means that prices for fares will not be cheap.

TLDR: don't expect cheap airfares once this ends

 

[MEL_Traveller]

Reduction of capacity means that prices for fares will not be cheap.

It will be interesting to see how this plays out.

For example, what will China do? China will be looking to re-establish its economy and getting its businesses running again. Part of that will be airlines because they employ so many people. So we could be back to having the major Chinese carriers flying all around the world, with multiple daily flights, and fares could be very competitive to fill those planes.

How will national carriers respond to that?

It might be that we have a two-tiered approach... flights to the USA with private carriers being more expensive (little or no competition) vs flights to Europe that could see significant competitive pricing.

What will SQ do? It might be that passengers are still reluctant to fly Chinese carriers post Covid-19, for whatever reason. But if a player like SQ comes into the market with a quality product, they might be able to fill planes, in the name of employment for the Singapore economy.

 

[opusman]

i think once we have a vaccine the desire to travel could rebound pretty quick. I'd be on a plane the day after my shot!

I'd give it two weeks myself

 

[Fergo747]

So we could be back to having the major Chinese carriers flying all around the world

Not whilst restrictions are currently still in place. Plus you can imagine governments not wanting their countries flooded by foreign airlines / cheap flights whilst they're trying to get their own carriers off the ground (yes I realise that the government doesn't own the airlines in a lot of the situations, however given the number of people they employ there is a direct interest in having them survive).

 

[Bundy Bear]

Chinese airlines might be cheap but I am sure passengers will be concerned about flying them.
Most airlines need agreements to fly between each country so there is a chance some countries could change who can fly to their country to get their own countries airline restarted.

 

[BAM1748]

I think once the virus is under control it will take a while, people and business will need to build up some funds before it's business as usual.

 

[MEL_Traveller]

Not whilst restrictions are currently still in place. Plus you can imagine governments not wanting their countries flooded by foreign airlines / cheap flights whilst they're trying to get their own carriers off the ground (yes I realise that the government doesn't own the airlines in a lot of the situations, however given the number of people they employ there is a direct interest in having them survive).

This thread is about 'post' Covid-19. Once we have a vaccine (12 months) what will the aviation industry look like. Some airlines may choose to keep their A380s grounded and fly smaller aircraft, bumping up prices. But there may be others that go down a completely different path, for their own reasons. For example China which will want to see employment generated for airports, airline staff, and the whole supply chain.

If you have a vaccine, are ready to travel... will you take a chinese airline? or stay at home. If Garuda is flying to Bali will you take them. Or stay at home.

The aussie airlines and TPAC markets may be slow to respond if they don't have compentition. But there might be a couple of different models progressing at different rates. And fares amy actually come down.

 

[theblank]

yet there is no advance thinking.

the situation is unprecedented.

Nobody on the planet could have foreseen this, and even if so, nobody would have put in a plan to deal with a once in a thousand years issue due to the cost.

 

[opusman]

A pandemic is extremely foreseeable, and scientists have been warning Western governments about the possibility for a long time now...

 

[Franky]

the situation is unprecedented.

Nobody on the planet could have foreseen this, and even if so, nobody would have put in a plan to deal with a once in a thousand years issue due to the cost.

Agree - not much point in doing too much forward planning when the parameters can't be identified. With the situation multiplying daily, even a crystal ball would be of no use right now.

 

[ethernet]

It will be interesting to see how this plays out.

For example, what will China do? China will be looking to re-establish its economy and getting its businesses running again. Part of that will be airlines because they employ so many people. So we could be back to having the major Chinese carriers flying all around the world, with multiple daily flights, and fares could be very competitive to fill those planes.

How will national carriers respond to that?

It might be that we have a two-tiered approach... flights to the USA with private carriers being more expensive (little or no competition) vs flights to Europe that could see significant competitive pricing.

What will SQ do? It might be that passengers are still reluctant to fly Chinese carriers post Covid-19, for whatever reason. But if a player like SQ comes into the market with a quality product, they might be able to fill planes, in the name of employment for the Singapore economy.

Truly excellent comment. If airlines go under or slash capacity, there will be spare landing slots. The privatised airports don't give a cough, but the want/depend on throughput! Those 'BiLateral' agreements should be eased and efficient operators will lobby hard. Hotels and Resorts are starving!

Back to my original comment. I usually buy for the same price I paid before for same route. Airlines could offer me the same prices (with some flexibility) and this time offer hotel rooms, and perhaps a free or subsidised domestic flight. Cheap ground content will close the deal. BTW wonder how many airlines still have fuel surcharges in place.

Airlines that do have a clue are EK, PAL and once upon a time MAS. Airlines in my bad books are AirAsia ($91*2) for 20kg of luggage and SCOOT(23 hour stopover - no way). No revenue engine can work post corona, as the baseline is screwed. EOI will solve this. The 2nd thing I like, is players like EK will re-negotiate landing fees and costs, and close routes where they were lied to.