LCC model challenges - IATA
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LCC model challenges - IATA
https://paxex.aero/2020/04/lcc-colla...stancing-iata/
It is easy for airlines today to talk about offering “social distancing” accommodation on board. Blocking middle seats or even sitting passengers every other row is not a problem when load factors hover in the mid-teens, occasionally peaking at 30% for an especially busy flight. But as lock-downs are lifted and demand (slowly) returns the planes will become more crowded. If social distancing demands remain in place at that time IATA executives believe the LCC market could collapse as a financially unsustainable endeavor.
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The article also argues that the U/LCCs will have to raise base fares and ancillary fees to make up for the lost load factor, insinuating that fares will be close to/equal to that of non-U/LCCs and passengers will gravitate that direction. If 66% of all seats on all aircraft were blocked off, ALL airlines will have to increase ticket costs, not just the U/LCCs. The value for the cost conscious traveler will still be found in the U/LCC model.
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I don't know who's going to be more impacted by this - full service or LCC carriers. I do, however, know that it is going to hurt all airlines for a very long time. Full service vs LCC won't matter much.
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