Airlines reduces fare to reconnect with flyers

Monday, January 11, 2021

Airlines have focussed on adopting new ways to reconnect with tourists and boost travel industry. While 2020 was a nightmare to the industry, first the pandemic outbreak followed by lockdown and travel restrictions for months. Now 2021 is the present transition year that is expected to take passengers again around the globe and help them boost the business by encouraging some 208 million annual trips.

2020 brought in unprecedented challenges to the industry in decades and the profitability reached a sudden halt. The coronavirus pandemic brought unforeseen challenges to the industry leaving carriers in a deep hole, along with a constellation of aerospace manufacturers, airports and leasing firms.

2021 is thus shaping up to be a transition year for an enterprise that takes passengers on the equivalent of 208 million annual trips around the globe. At best, the path ahead will be bumpy, with progress toward a return to travel dependent on the pace of vaccine roll-outs, access to capital, government policies and the unpredictability of a virus that’s not yet fully understood. Still, there will be leaps, including the first commercial flights to near-space.

Challenges and development

Fare challenges

From the present scenario it has been underpinned that airline industry is apprehensive about returning to business like before or until the vaccine is properly in use and people is safe to travel with lowering infection rates. Only then people might indulge into air travel. Amidst growing virus threat companies are including unique ways to proceed in the business and attract customers to return to business. They are offering trips at attractive price, so as to boost travel and reconnect with flyers.

Cash Quest

Inspite of challenges, airlines managed to generate revenue in 2020, however, more is essential in 2021 since last year they experienced poor business. Government is expected to continue its support in 2021 and helping growing business. France and the Netherlands, the largest shareholders in Air France-KLM, are in negotiations to inject billions of euros more, while converting part of the 10.4 billion euros already loaned into hybrid debt. Carriers like EasyJet Plc are likely to raise more equity, while cash burn remains a concern, according to Daniel Roeska, an analyst at Sanford C. Bernstein.

Bankruptcy:

Several airlines experienced bankruptcy or complete closure owing to pandemic. In Germany, Deutsche Lufthansa AG is taking straight aim at holiday specialist Condor by adding routes to sunny spots like Zanzibar and Corfu. Condor, once a Lufthansa unit that in 2019 survived the failure of then-parent Thomas Cook, could make a tempting target.

Space Trips

After years of work and premature predictions, the first “ordinary” space adventurers are poised to take flight in 2021 with billionaire Richard Branson inaugurating commercial suborbital rides at Virgin Galactic Holdings Inc. The company has told investors its spacecraft will carry Branson from New Mexico in the first quarter and then commence services with a group of about 600 early customers who have paid as much as $250,000 a ticket.

Thus several challenges popped in 2020 and new developments are the way forward in 2021.

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