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