A traveler walks in a mostly empty American Airlines terminal at the Los Angeles International Airport on May 28, 2020.Airlines cut domestic fares by an average 23 per cent last month as traffic picked up from April lows, global industry body IATA said on Wednesday, warning that post-coronavirus discounting posed a further threat to profitability.
But the uptick came at the price of fare cuts that airlines can ill afford on top of extra health measures and other new coronavirus-related costs.“Airlines need cash because of the crisis and they’re seeking to encourage passengers into seats by offering low fares,” IATA Chief Economist Brian Pearce said.
A return to profitability remains a distant prospect for many carriers, and the crisis may cost the industry $314 in lost revenue, IATA predicts. Asian markets, among the earliest hit, are now improving steadily, IATA said – with Chinese, South Korean and Vietnamese domestic traffic back within 25 per cent of year-earlier levels.
globebusiness Business travel will likely not return to normal levels ever again.