Industry leaders dismiss price hike fears

Industry leaders have dismissed fears of prices rising beyond the reach of many consumers following the Covid-19 crisis, with Ryanair chief executive Michael O’Leary going so far as to predict a “torrid pricing environment”.

O’Leary said on Monday: “There will be aggressive price stimulation. We’ll face a very strong return of passenger volumes but in a weakened pricing environment. Fares are going to be significantly lower.”

Ryanair plans to resume up to 50% of flights from July. O’Leary said: “We think we can stimulate an awful lot of bookings. We think load factors will be higher than expected because airfares will be very low and you’ll have hoteliers trying to grab some summer business. There is going to be a torrid pricing environment.”

O’Leary forecast: “Summer 2021 will be incredibly strong, but at lower prices. We’ll return to normal pricing by summer 2022 so long as there is no return of Covid-19.”

Tui group chief executive Fritz Joussen also dismissed fears of higher prices, saying: “I don’t believe we will see price increases. Prices will be reasonably stable. Everyone, when they want to kick-start their businesses, will want to make offers. We will want to make it attractive.”

Norwegian Cruise Line Holdings president and chief executive Frank Del Rio also forecast: “Airfares will be lower than usual for the next six to 12 months.”

Industry figures speaking on a Travel Weekly webcast last week warned prices would have to rise to pay for the crisis. Alan Bowen, adviser to the Association of Atol Companies, suggested: “Somebody will have to pay for all this.”

Speaking on a separate Travel Weekly webcast, Abta chairman Alistair Rowland criticised some operators for raising prices for 2021 when consumers rebook a cancelled holiday.

However, Abta chief executive Mark Tanzer said: “It’s very difficult to predict what’s going to happen to prices over the next 18 months. If there is social distancing on flights, it will cost more. On the other hand, fuel prices might go down. If hotels have undercapacity, do they charge more? Or charge less to fill the rooms? You’d have to be a fortune teller to predict prices in 2021.”


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