Airlines have announced concessions, but it’s not going to make up for lost demand.
The Covid-19 coronavirus outbreak has resulted in a dramatic reduction in airfares from the UAE to various destinations across the world. Airlines have also agreed to waive fees, cancel bookings with a full refund, and offer a free-of-cost change in flight.
Three of UAE’s major airlines – Emirates, Etihad and Air Arabia – have announced fee waivers for changes to bookings made on or from March 7 until the first week of April.
Emirates has implemented fee waivers for changes to bookings made on or before March 31, and are offering bonus tier miles and reduced tier travel requirement to help Skywards members retain their status.
A substantial drop in prices
A search for return air ticket prices on the travel company website skyscanner.ae from March 13 to March 20 to Kerala’s Kochi, for example, is at Dh698 on Air India and Air India Express. Emirates is offering tickets for Dh895 towards the same sector. Tickets to Mumbai are at Dh660 and to Karachi from Dubai on the same dates are at Dh862.
Tickets to other sectors have also dropped considerably as a stop-over flight to New York on Saudia Airlines is Dh1,938, and a direct flight on Emirates is Dh4,225. The usual fares to this sector so close to departure are priced at Dh4,900 and above. Similar price drops have been noticed in flights out of Sharjah and Abu Dhabi airports as well.
5 per cent decline in prices
Mamoun Hmedan, managing director, MENA and India of Wego, a travel booking website, said, “The average airfare dropped by five per cent year-over-year. However, a lot of airlines are offering discounts and deals to make up for the decline in demand.”
He explained, “According to our data, UAE travel demand seems to be the least affected among the GCC countries. The noticeable change is the new destination mix. We see a drop in search from the UAE to China and North Asia and South East Asia countries and an increase in the number of searches to India and Egypt by 40 per cent.”
Hmedan added, “Due to the spread of coronavirus, we are also seeing a shift in the trends as travellers are going more towards staycations. The search for staycations in the UAE has increased year-over-year. Hotel staycations grew by 60 per cent year-over-year. We also recorded a 54 per cent increase in the demand on the searches for resorts in the UAE.”
No amount of concession will make up for lost demand
Saj Ahmad, the chief analyst at StrategicAero Research, said, “The impact of the virus has seen not just demand plummet, but fares generally have taken a hammering as airlines attempt to stave off the fall in demand by lowering prices to attempt people to continue flying.”
He explained, “But it’s not so easy. With routes being dropped and indeed, some airlines are stopping flights altogether, no amount of concessions is going to make up for lost demand where flights have been scrapped, even temporarily.”
Prices could drop further
“Sadly, as the virus shows no sign of containment, the likelihood or more breakout will mean pricing getting weaker and weaker, as well as significant yield erosion,” said Ahmed.
Mark Martin, the CEO of Martin Consulting, said, “Given the fact that airlines have reduced their capacity significantly, they will want to fly as much as they can get traffic from the market. So, we are talking about mandatory imperative travel as supposed to leisure travel.”
Residents, expats avoiding all unnecessary travel
Arvind Sridhar, an Indian expat, said, “The company I work for has advised against all unnecessary travel. My family and I had plans to fly home to Mumbai over the vacations, but we decided against it.” Families with children have entirely decided against travelling until the covid-19 coronavirus completely subsides.
“The fares are very attractive. I’ve never seen it go this low. However, I would not want to travel since the risks are very high at the moment,” said Siraj Ahmed, another Indian expatriate.
