Coronavirus: International Flights just got more expensive

Coronavirus: International Flights just got more expensive

Coronavirus: International Flights just got more expensive

July 1, 2020

In early June I was looking at the price of flights between Madrid and Montreal. I was reassured to see that Air Transat (which consistently has the best prices between Canada and Europe) would be resuming their flights to Spain on July 3rd. The price for a 1 way flight Madrid – Montreal? $600 CAD (about $440 US). That price made sense, it’s what I’ve usually paid for a one way flight between Montreal and European destinations.

2 weeks later I went to book my flight with Air Transat. It was no longer there.  They scrapped it. In fact, looking at their updated schedule, the next available flight between Montreal – Madrid is December 20th, 2020.

Looking at the different options to fly back to Montreal in July I was struck by:  1) the few options available, 2) by the high prices.


Fewer Flights Options

When searching flights options on my favorite websites (Skyscanner, Expedia, and Kayak) I saw that Air France, KLM, Delta, and Virgin Atlantic all had flights Madrid-Montreal. But I noticed, when clicking on flight details, that the trans-Atlantic portion of the flight was all handled by one airline: Air France. In fact, the best flight options were all the same flight being sold by different codeshare partners (all part of the SkyTeam Alliance). Whichever flight you booked, you’d end up on that same Air France flight making your way from Paris to Montreal. The other best option was flying Madrid – Frankfurt – Montreal with a combination of Lufthansa and Air Canada (Star Alliance) but that cost over $3000 Canadian/person…

Other options were ridiculous. An option was flying Madrid – Istanbul on Turkish Airlines, having a long wait, then flying Istanbul – Montreal. Total time 31 hours. You could take Royal Air Maroc to Casablanca, have a 22 hour layover, then fly the same airline to Montreal. Total time 33 hours.

I’ve never seen such poor options flying Montreal – Europe.

 


High Flight Prices

We ended up booking Air France Madrid – Paris – Montreal. Total cost $1200 Canadian (about $880 US) each, one way. That’s double what we’ve paid previously on one way flights between Canada – Europe. And that’s actually a good deal when looking at other options: I went to the Air Canada, Iberia, and Lufthansa websites and punched in the dates. The average price came out to $3000 Canadian (about $2,200 US)/person, one way.

Note: now, more than ever, watch out how prices show up on search engines. They’ll show you what you think is a decent price and then you’ll find out that no checked in baggage is allowed. Then you’ll see it costs anywhere between $320 – $360 for 1 checked bag. Totally misleading. Even the Air France flight I booked (on their website) quotes “Lite Fare”. You have to pay “Premium Economy” to have 1 checked in bag up to 23 kg. More and more, airlines are being devious in their pricing and you have to go through all details meticulously.

 

 

My thoughts on Flight Prices

Different publications have had different thoughts on how the pandemic would affect pricing. Some have said that with lower demand, airlines would try to attract consumers with competitive pricing (which is true for regional budget airlines – see further below). Other travel publications have said that with lower airline load rates (the capacity in which a plane is full)* that the consumer would have to pay to make up for the difference ie. higher prices.

* The thought was that airlines would eliminate the middle seat to provide for more social distancing. Few if any airlines are doing this at this time of writing (July 1, 2020).

What I think is happening? On long haul flights, I think airlines are looking at the demand out there and deciding to cut routes. As of right now, air traffic is down 75% over this time last year. The airlines that are flying routes (like Air France in my example) are in turn charging higher rates for themselves and their codeshare partners, the alliance partners working together on routes to avoid competing against each other.

The other thing I’ve read (and previously mentioned) is that business and luxury travel are way down. That’s usually where profits are made for the airlines. So economy class passengers have to make up the difference if airlines hope to be profitable (or at least break-even).

Another note: With the pandemic, airlines are getting rid of their Airbus 380’s which is another sign of poor demand. I remember when Air France was flying the A380 (which fits up to 850 passengers) to Montreal. With the pandemic, they’ve gotten rid of all their 380’s. We’ll be flying a Boeing 787-9 which fits a max of 290 passengers.

 

Above: Air Transat has been very good to us (Air Canada not so much). Would be sad to see it go…


Many Airlines won’t make it…and that will have a major impact on pricing

Major flag carriers like Air France, Lufthansa and KLM will survive because of government backing. Many private airlines won’t. I mention Air Transat at the top. It’s a private company and has done well competing in the Canadian market with its cheaper fares to European and Caribbean destinations. Last year, after much negotiation, Air Canada struck a deal to buy Air Transat. The purchase hasn’t been finalized and with Air Transat now valued at 44% below the contracted upon price there’s a chance Air Canada will walk away.

If private airlines go under and all that’s left are government-backed flag carriers then there’s no doubt prices are going up. It’s how it used to be in the past. High volumes and high load rates over the last 10 years have made discount airlines viable and prices competitive.

 


Regional Budget Airlines…different but the same

I initially thought that it would only be long haul, inter-continental travel that would be affected. Doing some reading for this article I see that even regional budget airlines like Ryanair, Easyjet and Wizz Air risk going under (you’d think there would always be demand for a $50 flight across Europe, right?). The issue is a lack of demand due to the psychological impact of the virus. These airlines are right now slashing prices, hoping to get people flying again for this summer. See this excellent article on the current state of budget airlines in Europe.

 

 

A few Related Articles

The Toronto Star: Why flying is about to get a lot more expensive – for good

Forbes: Air Travel Prices Set To Double: U.S. Europe $2,200 Economy Fare

International Flight Network: Air France bids farewell to Airbus A380 fleet

 

Have you tried booking a flight recently? Any surprises?

12 Comments

  1. What I really want to talk about is this:
    Flashback to 2008…and thoughts on life changes…..which for me is intertwined with this article. I am contemplating taking an “Enhanced” retirement package from my Airline (major US carrier that will survive the pandemic…albeit changed). The company is blocking middle seats. Of course that costs passengers extra $$. The company is bleeding $50 mil a day (they say).
    So the money will be coming from the customers in some way. Enough about that……now…..on to me…..sorry I’m selfish, stressed, depressed and oppressed right now. I must make a quick decision to take a (they say “once in a lifetime”) retirement package. I only have about 10 days remaining to decide. My company threw in a “we are closing your base”, “so now get to commute by driving 4 hours /if you are lucky” or commute out of state (oh, and by the way….good luck commuting on a plane….there are no Seats due to ‘social distancing’ even though the A/C is recirculated). So, what to do?

    I LOVE traveling, I enjoyed my job for 31 years, I feel like I have so much to do still (probably always will), I saved for retirement, I had planned on working till 62 (7 1/2 yrs) then living part time in Italy and surrounds. Now what? I feel lost and without direction (maybe due to the shock and unplanned nature of this quick and sudden departure of my job). If I don’t take the retirement there are BIG changes (Furloughs, pay cuts, added hours to get benefits, possible reduction of vacation, etc, new commuting to and from work 4 hours each way/ and if I have to transfer bases out of state…add a day or so). It’s hard to leave a job that has afforded flexibility, stability, travel, providing interesting and amazing experiences. (Of course, I have aged with the job, its physically demanding, etc).

    All this is to say…..
    I happy that you guys made a plan so long ago and acted on it. What a scary thing. I didn’t know how scary until now. I am apprehensive for what’s next in my life. Before, I had it planned out. I understand change but whoa! I have been thrown a screwball.

    1. Hi Malinda,
      I’m sorry to hear your predicament, especially that you loved your job (something we hear rarely).

      But if you’re looking for my advice it would be to take the settlement. It seems that even if you didn’t take it, you might lose your job anyway. And the commuting seems impossible. Also, looking at the airline industry, this might be something that affects it for years. I just don’t see an upside for a while. And why knows: maybe a vaccine comes out in a year and they want to hire you back. But right now I would err on the pessimistic side and take the settlement.

      Both Lissette and I have been fired over the last 10 years. In Lissette’s case they fired her last year and we got a lawyer and got her a good settlement. That business was already on it’s last legs and is now basically dead. In my case I wasn’t happy with my new boss and we got into a fight that escalated. There too, I got a lawyer and we got a good settlement (note: we’re in Canada where labor laws favor employees). In both cases, we have no regrets and the way I looked at it was that I had a good career…but that it was time to move on. Sometimes life makes these decisions for you.

      I understand where you’re coming from though. No matter if you did/didn’t like your job, change is difficult and causes a lot of stress and worries. Best of luck Malinda.

  2. Hi Frank,
    Your one way tickets are pretty steep. I had no idea!

    Over here in India there are no signs yet of international flights restarting and we’ve been in lockdown since March :(. We were supposed to travel to Germany at the end of April on Lufthansa and we couldn’t get a refund. We’re only allowed a free rebooking to a new travel date upto December of next year, BUT we have to make a decision on our new dates by the end of this August. Since we haven’t hit our peak number of cases here and the situation seems out of control, I doubt Europe will allow travelers from India anytime soon. We also have to decide based on our daughter’s school holidays but with the current situation we don’t have a school calendar and will have to just pick a date and book by August end. If we don’t, we lose all the cash. The most convenient for us would be spring next year but we aren’t even confident that that would be far out enough!

    Lufthansa is allowing bookings from here for most routes from mid-September at the moment, so I did some checking for a few destinations and saw that prices vary but they’re more or less the same from pre-covid times on routes that are still plying. We were supposed to return via a new route that was supposed to start 3 months ago but it’s no longer offered and an alternate route is now more expensive.

    About the “light fares” on international routes – I saw that starting to happen about two years ago. When I booked tickets for Europe in 2018 for a Spring 2019 trip, Air France and some Gulf airlines were already separating tickets for no checked luggage and 1 checked bag. Lufthansa wasn’t. Then I booked for our trip this year and Lufthansa had joined the bandwagon. They had also tightened the terms of rebookings and cancellations for each fare type.

    So assuming we will be able to use our old tickets next year and travel to Europe, I’m very uncertain about being able to travel in the future like we used to. I think you’re right that flights will be more expensive, at least because some airlines won’t make it and several old routes will be cancelled.

    1. Thanks Claudine. Good to know what’s happening in India. We flew back to Canada yesterday: Madrid – Paris – Montreal with 7 hours in Paris. Things definitely different but also the same. I’ll be writing about that soon.

      What they are doing on flights cancellations is horrible. If people cancel I understand no refund…but if it’s because airlines cancel flights then people should get money back. Especially when it comes to the flag carriers who’re getting bailed out by governments.

  3. its really interesting Frank. Here in Australia our government is way more cautious I guess and you can’t book an international flight out of the country because no-one (well, next to no-one) is allowed in or out right now and they have no prospective date for international travel to resume. Domestically flights are sort of returning but Victoria, my state, has a few outbreaks where the rest of the country is mostly covid free, and so they wont let us in! jetstar were doing $19 fares but they are pointless if you live in Melbourne. Alan Joyce, CEO of Qantas doesnt think international flights will resume until mid-next year at best. at BEST. more likely 2022. Interesting to see over your way you can at least get a flight. im genuinely a bit jealous although i wouldnt be booking a flight right now, i’d feel happy knowing i COULD if i wanted!

  4. Hey Frank…. i just bought a return flight Paris to Toronto for C$637 with AF, departing 15 July, returning 27 Aug. I got it on Expedia.ca. I can’t imagine the extra leg from Madrid would jack up your fare so much. BTW, this fare is very close to the pre covid prices i saw for the same route

    1. Hi Don
      That is a phenomenal price, even better than pre-Covid. Can I ask when you purchased it? That might explain something.
      I just went to Expedia, entered your dates and it gave me $898 + $75 for 1st checked bag. Still a great price, still less than what I paid one-way…

      1. Hi Frank….i bought it on 30 june. I noticed a wide variation on prices for departure dates. Mid-week (as usual) was way cheaper than the other days. Also the Lufthansa/AC flights were cheap on certain dates but i didn’t like their departure times from europe.

  5. Hi Frank, In the past my fares have been what you quoted $3000 one-way, but $1,200 r/t…so fingers crossed they’re not too horrible now. In the past I’ve gotten around the extremely high fare by going through Bootsnall, booking numerous destinations at once on a one-way ticket – or, booking r/t and having my return date set out 11 months. Both have served me fine, just takes more planning and sticking to schedule. In fact, my return to USA this last time worked out perfectly this year, Feb 28, so I could help out with my grandson since both parents have essential jobs. My obstacle now, being American, is being able to leave, but my exit plan is in Oct, so hopefully it’ll all play out by then.

    1. Hi Paula!
      Not sure I understand. So you’re saying your normal fare would be $3000 return but $1200 one way? So why would you not just leave it open-ended, ie giving you the flexibility?
      We’ve always done it differently, usually booking flights 6 weeks to 1 month in advance. Usually, you’ll always save money buying return…for example, if a one way flight is $600 you’ll usually pay $900-$1000 for a return flight. That’s my experience, but maybe in your case because you’re booking so far out??
      In this case I’m happy we didn’t buy the Air Transat tickets when we 1st saw them…they would have cancelled and we would be out of cash. A lot of airlines (including Air Transat I hear) are right now holding on to the cash and giving out vouchers. Pretty sucky if they’re the ones who’ve just cancelled a flight on you…

Post a Comment

Your email address will not be published. Required fields are marked *


This site uses Akismet to reduce spam. Learn how your comment data is processed.

css.php