The price of flights

The price of flights is a very hot topic these days. Some say they are extremely expensive but, in some cases, you’ll find bargains. Restrictions and border closures don’t help. In some routes, airlines aren’t able to operate at full capacity and that translates into higher prices. The usual offer vs demand model may be hard to apply as well since both factors are limited by each country’s rules and restrictions. But with the vaccination rollout happening around the world, there may be a light at the end of the tunnel for both passengers and airlines.

Current situation

Although some countries are trying to make their way out of this pandemic, some are still facing restrictions that not only affect their daily life but the way they travel. For example in Australia, the international market is dead because there are no tourists allowed in and we are not allowed out. The domestic market was booming, but recent lockdowns affected domestic flights too.

Some airlines overseas are finding new routes, or offering very low prices in some routes to entice passengers. This is happening especially in European markets where it’s still possible to travel. But in one way or another, the sector is still highly affected.

The future

There’s no doubt that vaccination will play a massive role here. People need to be able to travel for airlines to get enough demand to run a profitable business. If the number of passengers is limited then the solution would be raising the price of flights and possibly losing clients. I don’t think airlines want to do that, but they can’t operate flights with 50 or 60 people either, it’s not possible.

So we need to establish a balance here. We need to be safe, and then we can be free to travel. I strongly believe we are starting to see the way out of this. The industry is responding to the need for safety with extra measures to reassure passengers, Governments and their staff as well. So, we will start seeing more flights as more people are vaccinated and restrictions ease. The flights will need to meet demand and the prices will reflect that. At the end of the day, airlines want and need to be profitable, and without passengers, they cant achieve that.