Air ticket prices could drop as carriers look to regain trust of passengers

Published: 22 April 2020 - 4:58 a.m.

Airline ticket pricing is likely to decrease once travel bans related enforced to contain the spread of coronavirus are completely lifted, according to Muhammad Ali Albakri, regional vice president (AME) of the International Air Transport Association (IATA).

In an Arabian Business report, AlBakri said that the idea of jumping straight back on a plane once the Covid-19 virus is contained may not appeal to everyone, with people wary of catching the infection.

As a result, he believed airlines must do everything they can to entice travellers back into the sky.

He told AB Live: “The industry will have to really go out there and regain the trust of the passengers,” adding that ticket prices could come down.

IATA has released updated analysis showing that the Covid-19 crisis will see airline passenger revenues drop by $314 billion in 2020, a 55 percent decline compared to 2019.

However, AlBakri said that airlines in the Middle East were running at losses even before the onset of the pandemic.

“If you look at the number, the estimated losses for the industry has been for almost $5 per flying passenger. Airlines in the Middle East started from a weaker balance sheet than any other airlines in the world,” he said.

“Where the global average of revenues for airlines was $5 per passenger mostly coming from North America, Europe and China, the Middle East unfortunately was estimated to lose $5 per passenger so we started from a weak position and we hit the wall because of Covid-19,” he added.

Full-year passenger demand (domestic and international) is expected to be down 48 percent compared to 2019.

IATA has repeatedly urged various governments in the region to provide monetary relief packages by means of direct financial support, loans, and tax reliefs but to no avail.

Last month, Dubai Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum vowed that Dubai will inject funding into Emirates amid the ongoing coronavirus pandemic, although no further information has been revealed since.

“It really worries us a lot that the Middle East is the only region that hasn't announced anything for the aviation sector,” said AlBakri

“We have seen it in Europe, China, Asia Pacific, North America and even in Latin America, but the Middle East has been falling behind and we cannot understand what's going on. We cannot understand what's taking so long for the government to come up and announce categorically how they can provide relief to this sector.”

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