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The travel industry is perhaps the most global industry we have, and is therefore one of the most vulnerable when borders around the world are closed due to the corona virus.
Last year, people traveled like never before. Headlines like “A record number of people flew with …” have replaced each other when companies report their traffic numbers. But at the same time, margins have been low after many years of severe price pressure.
This means that travel companies enter the crisis with few cash registers and many desperately need help to pass the downtime that nobody knows when it will end.
On the other hand, the crisis. It will be a new reality for both airlines and travelers, believes independent flight analyst Hans Jørgen Elnæs.
– Companies will not start routes with speculation that they do not know for sure what they can count on at that time. You should be very conservative in your growth when it all starts so you don’t take any risks, he says.
Hans Jørgen Elnæs has been Commercial Manager for Qatar Airways and Marketing Manager for Ryanair in the Nordic and Baltic countries. He believes that the Scandinavian countries ease the restrictions first.
“I think it will be the most important domestic traffic, the triangle in the Scandinavian capital and perhaps Brussels and London to begin with,” says Hans Jørgen Elnæs.
SAS CEO Rickard Gustafson said in connection with the alert Tuesday that he doesn’t expect normal flight demand until 2022. Until then, travelers should expect nothing more than tarnished flight schedules and more expensive tickets, Elnæs believes.
Point out the support packages. that SAS and many other airlines are entering right now. Some receive large capital injections, but many also involve loans, which can be paid at a decent interest rate.
Airports, which have a lower traffic frequency, may need to raise fares for airlines, and depending on how different restrictions remain, flights may have to go with empty rows or chairs between passengers.
– Much will be expensive for some time and this will increase the cost for each kilometer of passenger. This is accomplished again by increasing unit revenue, hence higher ticket prices and poorer route offerings.
How much more expensive can it be?
– It is difficult to imagine an assumption. Some say 50 percent, someone else talks about doubling. I think you should keep in mind that if airline tickets become too expensive, the less they want to fly. So the market stops and it’s an even worse problem for airlines than small margins, says Hans Jørgen Elnæs.
It is very possible that we are actually seeing ruins of hotels or infrastructure that are crumbling.
At the same time, climate and tourism researcher Stefan Gössling of the University of Lund believes that it will be possible to find some cheap trips for those heading to charter or truly tourist destinations, such as parts of Greece or Spain.
– Destinations will lead to a fight to attract the few tourists who can or want to travel. You can almost freely choose until the end of the summer where you want to travel without paying much, says Stefan Gössling.
And the fight has already started. Italy has already begun planning how to win the trust of tourists. Local politicians in Sicily are planning a € 50m fund to be used to pay tourists to get there.
“We know that we will not solve the problem, but it is the small resources that allow the sector to breathe,” Manlio Messina, head of tourism affairs in Sicily, told Palermo Today.
The idea is that if the region represents air tickets or parts of the hotel stay, there are tourists who spend money locally.
– The hope is that you will pay the air ticket. Of course, it is bad for the destination to throw away their product at no cost, but for travelers it is good, says Stefan Gössling.
There will be a false demand paid for by fate itself. But the real demand will eventually be there, you’re sure.
The question is how long it will take and what the places most dependent on tourism will be in the meantime. Take parts of Greece and Spain as an example. Places where everything revolves around making money from visitors from countries like Sweden and Germany, which today are completely closed.
– We’ve seen them go through a crisis before. Based on this, it is very possible that we will actually see ruins of hotels or infrastructure that are crumbling because nobody has the money to invest, says Stefan Gössling.
Regarding the winter trip to Thailand and other longer trips, think it will be even longer before demand returns. The first results of an ongoing research project at the University of Lund show that the distance from home is what scares the Swedes the most right now.
– The question of the risk of infection is not necessarily at the top of the list of what discourages travelers. It is the distance itself that creates uncertainty, says Stefan Gössling, adding:
– I just think we see the world in a new way where distance has a new role. The further away a destination is, the greater the fear.
What will the journey itself be like then? Hans Jørgen Elnæs guesses more problems and poorer service.
Several of the companies continue to fly. Domestic in, among other places, the United States already has requirements for mouth protection and in-flight service has been reduced. Discussions about freshness certificates or health checks at airports have also come up in the industry, says Elnæs.
– No one knows what it will be like, but I think that you, as a traveler, should be at the airport much earlier than before.
You mean temporarily then, if you’re traveling type this year?
– Perhaps as a new reality indeed. If the virus must be among us, it is not certain that it is only temporary. This was seen after September 11, 2001, with all the strictest security controls. They still largely remain, says Hans Jørgen Elnæs.
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