TAKE IT MARKET BY MARKET

After months of on-and-off national and local lockdowns, we have seen some very strange dynamics in the airline pricing market.

For short haul trips, it seems demand is very much still there, so pricing apears to be remaining somewhere near to where it was pre-covid, if not slightly lower.

But long-haul is a different story. Flights between the UK and China, in particular, have seen some crazy pricing, with British Airways charging upwards of £4,500 for a non-refundable return premium economy ticket from London to Shanghai, while Air China doesn’t even sell its tickets publicly anymore (although we hear stories of economy tickets to Europe on Air China and other Chinese carriers being sold on the black market for upwards of £7,000).

As choices diminish and demand remains high between Europe and China for Chinese returning home, the airlines are able to inflate prices. We see less price inflation for US flights. There seems to still be quite a large selection of flights, which are all nowhere near capacity, but the transatlantic carriers don’t seem to be changing their pricing. A discounted London-los Angeles business class ticket is still anywhere from £2,000-£4,000, no matter how full the plane.

Looking forward, I think most markets will slowly return to some form of normal pricing structure and capacity, starting from the start of next year as travel restrictions hopefully begin to be lifted. Once we are through this crisis and the major players must begin to start repaying the debt they’ve racked up this year, prices may very well go up in several markets. However, I would assume the most important thing would be getting people back on planes in the short to medium-term before worrying about profit margins.

Noah Meyerson, Managing Director of Traveltrust, a member of Advantage Travel Partnership