Kiwi travellers may have access to cheaper fares once things settle in the Middle East, say some aviation commentators.
The Middle East has been subject to serious disruption and confidence is required for travel volumes to return, says aviation expert Irene King.
New hubs through seemingly ‘safer airports’ have been establishing themselves and growing market share, she says and, in turn, travellers are using alternative carriers and developing brand loyalty.
“This is the perfect scenario for price lead competition,” King tells Travel Today. “We have on the one hand carriers who—while themselves have not suffered or created reputational damage, but rather been caught up in conflict due to proximity—need to recapture market share while those who have gained will do everything necessary to retain loyalty.”
Demand over the Middle East will be softer, she says, adding that the most impacted carriers will need cash to stop the red ink that is unabatedly flowing.
“The easiest and quickest solution is some highly attractive airfares almost to anywhere on the planet,” she adds.
IATA director general Willie Walsh is also hinting at cheaper airfares on the horizon, saying there’s a very close, almost direct, correlation between oil price and ticket price. “Nobody knows what’s going to happen in two to three months,” he says.
“But certainly, the forward curve would suggest that [oil] prices will come down and get back to where they broadly were at the end of Feb by the end of this year.”
. . . Domestic
Close to home however, affordability is little further away. King says a very different scenario is playing out for New Zealand domestic airfares with capacity constrained, competitive pressures weak and price rises being built into airfares.
“Alternative airline management can rethink their pricing strategies but at the present moment there is no evidence of this,” says King.
