Industry experts predict that to make up for the empty middle seat — a casualty of social distancing requirements in the age of COVID-19 — passengers flying low-cost carriers would need to pay 50% more than they do now to fill the revenue gap.
That’s according to a blog post from OAG, a British global travel data provider.
Paying For Empty Space – ultimately low-cost airlines exist because they are very successful at what they do, creating demand, filling planes and maximising revenues and subsequent profitability. LCC’s are businesses tasked with delivering shareholder value and profit; leaving one-third of your stock unavailable for sale is unrealistic; unless of course you charge extra for those seats that are sold. So, here’s some headline analysis of what that would mean.
For five of the largest low-cost airlines operating around the globe OAG identified their average yield per passenger and then assuming a requirement to retain the same levels of revenue what the impact on passenger yields would be for each airline. In summary, every passenger would need to pay 52% more than they currently do to fill the revenue gap that would be created by leaving the middle seat empty. Is that realistic, will passengers pay that much more or is the risk too great for airlines that typically stimulate demand through price?
After low-cost carrier easyJet projected the possibility of leaving the middle seat empty in the era of post-coronavirus travel, OAG crunched the numbers and found that every passenger would need to pony up 52 percent more than current plane tickets for no-frills airlines.
To come up with that figure, experts identified the average yield per passenger on five of the largest low-cost airlines in the world and calculated the requirement to retain the same levels of revenue. pay 50% more
But that kind of price mark-up defeats the whole business model of the low-cost airline, which offers lower airfares by squeezing in as many seats as possible into a cabin.
To adhere to social distancing rules, airlines like JetBlue, United, Alaska and American Airlines have also limited the number of seats for sale or temporarily blocked off the middle seat.
