Average airfare in the Middle East could jump by 50 percent due to the social distancing measures adopted to curb the spread of the novel coronavirus, according to the International Air Transport Association(IATA).
IATA predicts airfare in the Middle East and African (MEA) region would increase significantly from an average of Dh664 to Dh950.5.
Alexandre de Juniac, director-general and chief executive at IATA, eliminating the middle seat will raise costs. He said if airlines can’t recoup the costs in higher fares, airlines will go bust.
IATA further revealed that carriers across the globe should hike airfare between 43 to 54 percent to get breakeven if seating capacity is limited to 62 percent.
Mark Martin, CEO of Martin Consulting told Khaleej Times, “IATA’s projection of 43 percent is a sweet spot of accuracy. I believe it will be anywhere between 43 percent to 70 percent increase as we will be dealing with different load factors in different sectors. So, if an airline is going for a nine-hour flight with 50 percent occupancy, they still need to recover the operating costs. We also looked at the worst-case scenario. For example, if it costs now around Dh2,000 to go from Dubai to San Francisco or LA with a minimal cargo, the cost of a ticket should be least Dh7,000 to Dh8,000 due to social distancing. So, it is going to be very expensive.”
“Also, it depends on which sector you are flying. For Gulf carriers, Asia the market is where they make bread and butter as it is less than five hours of flight. There are going to be clearly tough times and we are not expecting occupancy coming at 70-80 percent until we see a substantial breakthrough in vaccines for the virus,” he said.