Covid -19 pandemic and its impact on air carrier pricing

Abstract

Covid-19 pandemic influenced whole world and also airline industry. Air traffic was suspended for several weeks. The resumption of air traffic has been accompanied by a number of hygiene measures to prevent the further spread of the above-mentioned virus. We can also prevent the spread of the virus by reducing the number of passengers on board the aircraft. However, this restriction has a direct effect on the load factor and thus the profitability of the airline. In this article, we focus on recalculating different scenarios with regard to limiting the number of passengers on board of the aircraft at the same time and we have calculated the change in air transport prices with respect to costs and these limitations. The individual scenarios either copy the limitation of the number of passengers on board and thus the price is directly proportional to this reduction, or the individual scenarios work with limiting number of passengers on board but the price for transport is inversely increased so that the air carrier covers the cost of the flight. Results of these calculations shows margins between prices in different scenarios. Paper also proposes the best possible scenario for calculation of ticket price.