March 3, 2024

IATA: Fares will drop to tempt travellers

By Bev Fearis, published 10/06/20

Airlines will need to slash fares to entice business travellers to take to the skies again next year, according to the International Air Transport Association.

Releasing its latest outlook, IATA forecast that airlines would lose $84.3 billion this year, the worst losses in aviation industry and equating to a loss of nearly $38 for each passenger.

Even when travel restrictions are relaxed and there’s a rise demand, the airline industry is expected to incur further losses of $15.8 billion next year.

“Airlines will still be financially fragile in 2021,” said Director General and CEO Alexandre de Juniac. “Passenger revenues will be more than one-third smaller than in 2019. And airlines are expected to lose about $5 for every passenger carried.”

He said there would be keen pricing to entice travellers to return to flying.

“Competition among airlines will no doubt be even more intense. That will translate into strong incentives for travellers to take to the skies again. The challenge for 2022 will be turning reduced losses of 2021 into the profits that airlines will need to pay off their debts from this terrible crisis,” he added.

IATA believes the opening up of air travel is likely to be progressive, starting with domestic markets, followed by regional and finally international.

“People will want to fly again, provided they have the confidence in their personal financial situation and the measures taken to keep travellers safe. It is important that industry and governments follow it so that travellers will have the maximum reassurance about their safety. That will be a good start,” said de Juniac.