Will Trans-Atlantic Fares Hit Discount Levels for Remainder of 2021? Not Necessarily

Flights Computer Key Shows Overseas Vacation Or Holiday Booking (Photo: iStock)

As European carriers look forward to the re-opening of trans-Atlantic passenger travel, analysts suggest that airlines won’t discount airfares. Instead, the recovery of Europe’s great airlines will be dependent on flyers paying regular fares to travel internationally.

Because of the lack of passenger demand due to COVID-19, 2020 was a year of discounted airfare between many destinations. With the eventual re-opening of passenger travel between the United States and Europe, will that trend continue? Reuters reports airfare could go back to full price as inventory increases.

With European Carriers in Trouble, Discounting May Not Be the Future

Among all the carriers affected around the world, the European sector was hit the hardest by the COVID-19 pandemic. An analysis by CAPA Centre for Aviation noted that among all international sectors, Europe would have the largest hurdle to overcome before returning to “normal.”

As a result, flyers may not be able to get discounted trans-Atlantic flights into the remainder of 2021 and into 2022. Instead, because trans-Atlantic corridors are the most watched, many expect prices to return to normal once flights go on sale.

“The North Atlantic is historically the most disciplined traffic region,” Carsten Spohr, chief executive of Lufthansa, said in a call with investors as quoted by Reuters. “I expect this discipline [to] prevail.”

Airline executives are not the only one predicting that trans-Atlantic flights will come back to normal sooner rather than later. Analysts at both Bain & Co. and OAG believe that because European carriers took the hardest financial hits, they will manually bring flight prices continually higher.

Even though pricing may start rising, it’s not stopping travelers from booking airfare. Travel from the United Kingdom to Orlando has recovered by nearly 50 percent with Walt Disney World coming back online, while OAG is predicting airlines will increase inventory to around 65 percent of their pre-pandemic schedule.

Air Cargo Programs Continue to Lift European Airlines

Meanwhile, European carriers continue to stay afloat thanks to strong demand for international air freight. According to the International Air Transport Association, air cargo continues to remain a very healthy profit center for airlines, as demand in March exceeded pre-pandemic levels by 4.4 percent.