IATA chief executive Alexandre de Juniac has said social distancing measures could spell the end for “cheap travel”.
“It is very clear that if social-distancing is imposed inside the aircraft it will neutralise a huge proportion of seats – at least a third – for short- and mid-haul aircraft,” said the former Air France-KLM executive.
Various government bodies and organisations have released guides on social distancing, and appropriate distances to remain separated from other individuals. While current advice from the WHO states that individuals should remain at least one metre apart at all times, many governments and airlines have gone further.
Large airlines such as Lufthansa and AA have taken steps to integrate these measures into operational protocol. However, de Juniac states that, over time, this will lead to price hikes.
The IATA’s December 2019 report into the economics of aviation assessed the global breakeven load factor (BLF) at an average of 65.9 per cent. This figure represents the number of seats needed to be filled to sustain operations, and is typically higher for short-haul routes or those operated by LCCs.
If social distancing measures require airlines to (for example) leave every middle seat empty in a 3-3 formation, de Juniac states it will make it “impossible” for tickets to stay at the same price.
“If you are selling the ticket at the same average price as before, then you lose an enormous amount of money,” he reasons.
“If the ticket price is increased by 50 per cent then you are able to fly with a minimum profit.”
Yet “if social-distancing is imposed, cheap travel is over”, de Juniac states.
In the same briefing, IATA chief economist Brian Pearce outlined why a return to pre-pandemic levels is unlikely any time soon. He pointed to the Chinese and Australian domestic markets, both of which have yet to show major signs of recovery despite stable infection rates.
In Australia, domestic flights remain at 10 per cent of pre-outbreak levels, even as new COVID-19 infections hold close to zero.
