After 9/11, domestic flights within the U.S. fell 18% in price. After the 2008/2009 recession, they fell 21%. But no drop has been more severe than the one caused by the coronavirus pandemic, according to new research from DollarFlightClub.
Domestic flights within the U.S. are 41% lower on average—and will be throughout 2020. International flights from the U.S. are 35% lower on average.
“In the short term, for travelers willing to book flights today for future travel, these industry shocks are decreasing flight prices significantly," wrote DollarFlightClub in its report released in July.
However, in the long run, DollarFlightClub says flight costs will increase because of the coronavirus and because of limited competition or options.
“The airline industry is about to get much smaller which is bad for passengers. Customers will have fewer choice of airlines, flight times, and available routes and markets. All of that means passengers will pay more when they return to the air," wrote DollarFlightClub.
On the bright side, the report found that even with limited flight options, travelers will benefit from fewer flight delays. But bag fees and other miscellaneous charges are expected to increase as airlines seek profitability
“With airlines loosing at least 2x revenue in comparison to post 9/11 and the Great Recession we can expect them to ramp up additional fees to get back to profitability as travel demand returns.”
In more airline news, Spirit Airlines (SAVE) - Get Spirit Airlines, Inc. Report is prepping to furlough as much as 30% of its workforce in October due to the coronavirus pandemic. JetBlue’s (JBLU) - Get JetBlue Airways Corporation Report revenue tumbled 90% in the second quarter to $215 million.
On July 22, Jim Cramer told TheStreet's Katherine Ross that there are still people who love the airlines and are buying airline stocks. Those people believe the airlines will come back once a vaccine is released, said Cramer.
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