Already, airlines have cancelled over 200,000 flights to and from China sending jet fuel prices plummeting to over two-year lows
Mention Coronavirus, and the first instinct is for people to stay at home and cancel all travel plans. But don’t do that just yet. Here’s why:
The global airline industry has been severly impacted by the Corona carnage, with a sharp decline in travel demand worldwide. In fact, The Global Business Travel Association, one of the world’s leading business travel and meetings organizations, has warned that the COVID-19 virus could cost the travel industry close to $46.6 billion per month in revenue, which translates into $559.7 billion annually, or 37% of the industry’s total 2020 forecasted global spend. Supporting this finding is a report on The NYSE Arca Airline Index website which tracks 16 carriers in North America and Latin America: “As the number of cases of the virus, called COVID-19 grows and spreads around the world, companies and individuals are cancelling trips with the Pacific region faring worst. The weekly decline represents 400 basis point acceleration in the rate of decline from a week ago. On a rolling four-week basis, travel agency ticketing is 4.4% lower than a year ago, also equal to a 400 basis points decline.”
To survive, airlines need to attract a substantial number of flyers, especially the high spending corporate ones, but analysts say this looks unlikely now. Already, airlines have cancelled over 200,000 flights to and from China sending jet fuel prices plummeting to over two-year lows. Major events and shows have also been cancelled or postponed, affecting travel. Whether this impact is short or long lived is another issue, but the fact is that at this point, airlines are doing everything they can, to increase demand and stay afloat.
Steering through the storm
JetBlue Airways, that serves the US, Latin America and the Carribbean, for instance, said last week that it would scrap fees for those who would wish to cancel or change the date of tickets. Alaska Airlines soon followed, with the announcement that “people who wanted to cancel or change flights booked between Feb. 27 and March 12, 2020 can receive a full travel credit that can be used up until a year from when it was first issued.” American Airlines is the latest carrier to waive change fees on all tickets brought in the coming weeks.
Closer to home, both Emirates and Etihad waived rebooking, refund and cancellation charges for passengers travelling to and from China, in January.
Emirates Group which operates the world’s biggest airline by international traffic is encouraging staff to take leave as the coronavirus outbreak slows demand for travel, according to Bloomberg. “We’ve seen a measurable slow-down in business across our brands, and a need for flexibility in the way we work,” according to an internal email seen by Bloomberg and confirmed by the Dubai-based airline.
Prices: Can you afford a $1 flight?
In Indonesia, airfares are expected to fall by 40 to 50% on routes considered most affected by the outbreak, a report in The Jakarta Post said. “The incentive is expected to attract about 736,000 tourists from foreign markets who have a high average spending level on vacation…one of the markets is Australia, whose tourists spend an average of $1,800 per arrival in Indonesia. Another is the Middle East, whose tourists spent $2,200 on average,” the report quoted Tourism and Creative Economy Minister Wishnutama Kusubandio as saying.
Just two days ago, Tukish Airlines Andalou Jet was selling tickets at prices starting at $1 (approximately AED 3) for its new international flights beginning March 29 from Istanbul and Ankara. The flights from Baghdad, Erbil to Turkey were sold at prices starting at $1, while the starting ticket price for flights, from Kuwait were offered at 1 KWD, from Dubai at AED 9, from Dammam and Riyadh at SAR9. Flights from Baku, Barcelona, Berlin, Frankfurt, Paris, Milan, Moscow, Rome and Tiflis began at 1 Euro. Prices for the tickets for the flights from London were at 1 GBP. Discounts were available for a limited number of seats between 29th March – 24th October 2020 for tickets purchased from all sales channels up to March 1st 2020. However, these tickets cannot be cancelled, returned or changed.
Meanwhile, Asian carriers such as Cathay Pacific, China Southern, China Eastern, and Xiamen Air have offered reduced prices for flights to cities such as Tokyo, Bangkok, and Seoul, from New York City, Los Angeles, Chicago, and Boston. Return flights to these cities cost only around $460 (as compared to the usual $700) for select dates in March and April, according to travel booking website Skyscanner. Thai Airways International is also offering free changes of destination for holders of flight tickets to Japan, South Korea, Taiwan and Singapore. Spring Airlines, a low-cost carrier, is offering one way tickets from Shanghai to Chongqing for just 29 yuan, or $4.10, according to a South China Morning Post report.
Protect and book
If you’re not the kind of person who changes plans for even something as serious as a killer virus, you don’t have to cancel plans just because some airlines are. There are plenty of great deals out there and it wouldn’t be a bad idea to capitalize on the airline offerings and take a well needed break. Of course there are dangers and safety is first, but if you’ve seen the latest Corona-resistant wardrobes (pictured above) coming out in China and around the globe, offering 100% protection from Corona or anything viral, then flying could prove very wallet friendly this time of year.