Will cheap flights still be possible in Covid-19 era?

People walk inside the domestic departures terminal at Don Mueang airport in Bangkok on May 1, 2020. PHOTO: EPA-EFE

BANGKOK - Before the coronavirus crisis, the budget airline boom made it possible to hop onto a plane within hours of booking a ticket and sometimes pay no more than what it takes to travel by land to the same destination. Now, airlines are cautiously restarting domestic flights amid tight scrutiny by aviation authorities.

The Civil Aviation Authority of Thailand, for instance, requires airlines to space passengers apart. The Straits Times Indochina Bureau chief Tan Hui Yee speaks to analysts to find out what this means for the future of air travel.

Q: Is this the end of budget travel? Will prices of air tickets rise?

Analysts and observers are divided on this matter as it will depend on new aviation rules, how long they might be imposed for, and the level of competition in the industry.

Even if other aviation authorities follow Thailand's lead in requiring passengers to be seated apart, ticket prices might not necessarily rise, notes Mr Brendan Sobie, an independent analyst from Sobie Aviation.

"You are going to have a lot of distressed airlines out there trying to generate cash with all these airplanes they are trying to return to the sky," he says. These airlines will be competing with one another for customers even if they can only fill 60 to 70 per cent of their seats on each flight, he adds.

Along the way, some airlines might go belly-up.

"If there is less capacity and fewer flights, prices will go up," says Dr Mario Hardy, chief executive of Pacific Asia Travel Association. "But it will depend on demand too… This is as much an economic crisis as it is a health crisis."

Ticket prices will also depend on oil prices, which have sunk to new depths in recent weeks.

Mr Paul Yong, aviation analyst at DBS Bank, does not expect air ticket prices to remain permanently higher than their pre-pandemic levels.

"Overall the aviation sector remains highly competitive. There are always new players and new start-ups," Mr Yong says. "We may see firmer prices for a while, but eventually competition will ensure that prices still stay fairly reasonable."

Q: Will last-minute travel still be possible?

Given pre-flight health checks and other requirements being imposed on international travellers, trips will likely need to be planned well in advance, says Dr Hardy.

Even if a coronavirus vaccine becomes available and is widely distributed, last-minute travel will not be as easy as before, he warns.

Ms Johanna Bonhill-Smith, a travel and tourism analyst at London-based consultancy GlobalData, says all the new pre-flight checks may motivate travellers to venture abroad for longer periods rather than make short getaways.

"The last-minute market has been a key trend for all types of travellers," she says. "I don't think this will be the end of last-minute travel. But it may just be halted for a little while."

Q: With social distancing requirements, will airlines reconfigure planes? Will economy class and business class seats start to look more alike?

Reconfiguring planes is a big decision that can only be made when the outlook becomes clearer.

For now, there's still no conclusive research that shows how effective spacing travellers apart can be in reducing virus transmission, says Dr Hardy.

Ms Bonhill-Smith thinks that even if planes are configured to space economy travellers further apart, airlines will still strive to keep a distinction between economy and business class seats.

"It will go up their quality chain," she says.

Mr Yong thinks seating passengers alternately is not sustainable.

"Economically, it doesn't make sense for the airline in the long term," he says. "For a typical (Airbus) A-320 budget flight with 180 seats, if we want to place people in alternate seats, you probably won't even fill half the plane."

The larger question right now is whether this global lockdown period might alter business travel patterns permanently, he says.

"With all these work-from-home measures taking place, a lot of technology has enabled conferences and connections to be made. Will this adoption and validation of technology replacing business travel structurally lower the demand for business travel?" he asks.

Demand for leisure travel, in contrast, may be more resilient than business travel. "You can't really replace the holiday experience with a digital experience," he says.

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