Airlines and airports are taking forecasts on how they will fight with the Covid-19 to fill their planes soon, carrying out new security controls. Ensuring the safety and confidence of passengers is important, but there is something else that the airlines will need to focus on, and that is flight fares.
Michael O’Leary, CEO of Ryanair, assures that a “price war” could be generated between traditional and low-cost companies, such as Ryanair.
Regardless of whether they have received state aid or not, airlines must prepare to start flying from June or July -with certain restrictions-, in this way they will have to take into account the psychological fear of passengers, who want to avoid becoming infected during a flight, and the economic situation of many citizens; which will lead them to that ‘price war’ to attract users as indicated by O’Leary.
Some airlines may adjust to this low-cost model, such as Ryanair; but others cannot do so because of the liquidity crisis that the aeronautical sector has experienced with 90% of the fleets on land for some months. In addition, all will have to face the prices of the ‘new normal’, even this could cause problems for the low-cost airlines themselves if security measures prevent some services on board, since the cost of other services could increase, or would have then looking for another source of income to continue offering low prices.
For those airlines that cannot achieve profitability at competitive prices after the coronavirus, their future will be uncertain. O’Leary assures that “bankruptcies will become a fatal end for many.”
Source: El Español