The end of cheap airline tickets?

Flight to Mallorca for… ten euros? A few years ago this was often possible with cheap airlines. More and more such tickets are becoming increasingly difficult. To some extent this has to do with raising the awareness of both the passengers and the climate protection companies, as airlines have often been targeted because of increased carbon dioxide emissions. The topic of climate change has been a hot topic for the airline industry in 2019. Lufthansa chief Carsten Sports had said that flights under ten euros “are ecologically and economically a craze”. An additional reason that has raised ticket prices in Germany is the increase in air tax.

Many reasons are driving airlines to change strategy

Air transport is the following: when passengers save money, shareholders pay the costs. Like Laudamotion, a subsidiary of Ryanair, so did Eurowings, a subsidiary of Lufthansa, ‘hit red’ in debt. That they managed to survive is due to their financially strong parent companies. However, parent support does not seem to be a long-term solution.

Also in 2019, German airline Germania, Icelandic Wow Air and British travel colossus Thomas Cook went bankrupt. In this context, experts consider it a good move that many companies are revising their pricing policy. “Flight schedules for the winter are encouraging,” air carrier expert Daniel Reska from Bernstein told dpa.

For the winter, airlines seem to follow a more ‘disciplined’ policy. Ryanair, for example, significantly cuts its bids, Easyjet deliberately cuts the flights offered, while Eurowongs mainly cuts domestic flights to Germany. In addition, Ryanair, Europe’s largest low-cost airline, was also affected by the Boeing crisis. The flight ban on the Boeing 737 Max in 2019, following two crashes of this type and 346 deaths, directly affected the Irish company, as its own orders were pending. Aircraft of this type are no longer allowed to take off. Ryanair is waiting for new, less energy-intensive models to expand its fleet. Until orders are completed, Daniel Resca estimates,

Despite the positive forecasts, the shocks continue

According to the International Air Transport Association (IATA), increased profits are expected for European air transport. However, although the general trend is positive, some companies have lost and others are now returning to profitability. Problems in many companies remain. Lufthansa in 2019 accounts for one-third of its record-breaking earnings in 2018. At that time it had made profits of € 3 billion despite the bankruptcy of its subsidiary Air-Berlin. At the same time the dispute with the UFOs of the flying companions has not been resolved, which has led to strikes at Eurowings. The Italian airline Alitalia is also in trouble, with the Italian state losing its patience demanding radical changes. But Condor, which, despite the bankruptcy of its parent Thomas Cook, survived on a state loan.

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