The travel and tourism sector has become one of the worst hit industries due to the coronavirus pandemic. As a result of the COVID-19 crisis, the global business travel market is predicted to see a loss of $810.7billion (£654.5billion) in revenue in 2020, with China seeing the biggest loss, according to Statista. Airlines are just one of the industries that are contributing to this loss, with one expert predicting that more than 400 airlines worldwide are expected to file for bankruptcy this year.
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The US federal Bureau of Transportation Statistics announced on Monday that airlines made a combined $5.8billion in revenue on baggage fees last year alone, meaning that this year, they are expected to make a lot less.
Along with ticket change and cancellation fees, airlines made $8.6billion (£6.94billion) in key ancillary revenue streams in 2019.
CEO and Founder of Send My Bag, an international luggage delivery service, Adam Ewart, explained that as airlines restart their operations, these hidden ancillary costs or “added extras” could rocket, making air travel a lot more expensive.
He explained: “Since Flybe became the first UK based airline to charge for checked baggage in 2006, ancillary revenue has increased exponentially.
“Initially, more and more airlines followed suit and began charging for baggage, but it wasn’t long before these hidden fees were applied elsewhere: from priority boarding to seat reservation.
“The federal Bureau of Transportation Statistics has now announced that US airlines collected $5.8billion (£4.68billion) in baggage fees last year, and the UK is on a similar course.
“With the spread of coronavirus, airlines are unfortunately experiencing unprecedented financial turbulence.
“However, in order to recoup the estimated $314billion (£253.5billion) in revenue lost this year, there is reasonable concern that airlines may hike up ancillary costs once travel restrictions are lifted.”
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He said that the main “added extras” that airlines could charge for include rising baggage fees.
Mr Ewart added: “This would see passengers having to pay more across a greater variety of ‘added extras’, potentially including rising baggage fees and seat and ticket change fees, as well as increasing costs on other less traditional ancillary revenue streams such as in-flight Wi-Fi.
“Although the current circumstances are regrettable, it shouldn’t be down to loyal customers to keep airlines afloat, particularly when they may be facing financial difficulties of their own.”
Currently, Foreign and Commonwealth Office (FCO) advice is urging all Britons to avoid non-essential travel worldwide “indefinitely” unless it is essential.
Some airlines have already announced their plans to restart their operations in the coming months.
British Airways’s owners IAG announced yesterday that it is hoping to re-start flights in July if coronavirus lockdown measures are eased.
IAG chief executive Willie Walsh, said: “We are planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world.
“We will adapt our operating procedures to ensure our customers and our people are properly protected in this new environment.”
Wizz Air has already resumed some flights from Luton Airport.
The airline became the first in Europe to continue its services following the coronavirus outbreak.
The budget airline also announced five new routes which include Faro in Portugal and Corfu, Heraklion, Rhodes and Zakynthos in Greece.
However, the new routes will begin in mid-June for Portugal and July for locations in Greece.
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