Here are some developments to look for over the next 12 months.

Fare wars

Airline traffic won’t see a major boost until vaccines start to bring down infection rates. Even then, it may take effort to get some people back on planes. In Europe, that will mean fares as low as €9.99 (US$12.33), according to Ryanair CEO Michael O’Leary. Other ideas include free hotel stays, two-for-one deals and complimentary travel insurance.

The pandemic has changed travel, so where should we go in 2021?

Travel pass promotions from carriers such as China Eastern Airlines, which is offering unlimited flights for a single price, have proven popular and been extended into this year, while online agents show ultra-cheap trips in China for the Lunar New Year holiday next month.

The key question is how long it’ll take to wean customers off those incentives. An upturn in leisure and family travel should hit by midyear, depending on the region. More lucrative business traffic is likely to trail as companies resist sending people out on the road.

John Grant, chief analyst at flight booking specialist OAG, says it won’t be a recovery until enticements are no longer needed and carriers can manage routes for profit.

Airline shakeout

Dozens of airlines have disappeared or filed for bankruptcy since the pandemic began. More are on life support, in danger of getting swallowed by stronger players. In Germany, Lufthansa is taking aim at holiday specialist Condor by adding routes to sunny spots such as Zanzibar and Corfu.

Condor, once a Lufthansa unit that in 2019 survived the failure of then parent Thomas Cook, could make a tempting target. However, big players such as Lufthansa that accepted bailouts may be prevented from making purchases by terms of state aid packages.

In India, Tata Sons bought out struggling partner AirAsia’s stake in a local joint venture. State-owned Air India is another potential target, possibly through Vistara, Tata’s venture with Singapore Airlines. Air India’s buyer would “definitely need to make it a lot leaner”, Bloomberg Intelligence analyst James Teo says.

Space trips

After years of work and premature predictions, the first “ordinary” space adventurers are poised to take flight in 2021, with billionaire Richard Branson inaugurating commercial suborbital rides at Virgin Galactic. The company has told investors its spacecraft will carry Branson from New Mexico, in the US, in the first quarter and then commence services with a group of about 600 early customers who have paid as much as US$250,000 a ticket.

Branson’s venture could see competition from Jeff Bezos, who’s developing Blue Origin’s New Shepard reusable rocket for suborbital rides. In October, the company performed its seventh test flight from Van Horn, Texas. It plans “a couple” more before humans fly.

A third outfit, Elon Musk’s Space Exploration Technologies, is set to fly a four-person private crew for Axiom Space late in the year. The group will have a 10-day stint aboard the International Space Station as part of Nasa’s efforts to spur commercial enterprise in low-earth orbit.

Widebody woes

While interest is starting to pick up for smaller planes, the market for twin-aisle aircraft from Airbus and Boeing is “beyond grim”, said aerospace consultant Richard Aboulafia. Sales were depressed before the outbreak, and a surplus of used models will crimp demand for years.

With long-distance travel on hold, Airbus and Boeing have seen higher retirement rates for their biggest planes and a dearth of new orders. And there’s not much sign of encouragement. Boeing is fighting to hold on to orders for the largest plane on the market, its 777-9, which is two years behind schedule.

Analysts see more production cuts ahead for the better selling Boeing 787 – which is also beset by production woes – and the Airbus A350. Output of the less-popular A330 could go down to one a month, according to Agency Partners analyst Sash Tusa.

The plane has struggled to attract orders despite a re-engined version, with the financial troubles of biggest customer AirAsia X, the Malaysian long-distance carrier, the latest blow. Still, analysts predict the programme will limp on at lower rates rather than being scrapped.

Weaker links

Major airlines packed into ever smaller destinations as the boom in air travel hit its zenith in 2019. Now, they’re dropping newly unprofitable routes to stem losses. Fewer flights, smaller planes and reduced big-city connections are eating into the economies of several tourism-dependent locations. 

  Some of the pullback could last indefinitely, according to Grant. Particularly vulnerable are long-haul routes that were still in their developmental phase. From late March, British Airways will permanently axe 13 long-haul routes serving North America, the Middle East, South Africa and Asia (including Seoul, Kuala Lumpur and Osaka). Cathay Pacific will cease operations to seven locations: Brussels, Dublin, London (Gatwick), Male (Maldives), Newark, Seattle/Tacoma and Washington (Dulles).

Cities such as Manchester, England, are vulnerable to weakening links to key markets such as China, while flights from Beijing to Lisbon, Barcelona and even Madrid could come under pressure as airlines re-evaluate.

Large Middle Eastern carriers such as Emirates and Qatar Airways, which thrive on whisking passengers across the world, aren’t likely to fill the gaps, according to Grant. He says they’re serving as many destinations as they realistically can, given a dearth of connecting traffic. “It’s more about getting back to pre-Covid capacity and demand levels.”

Start-up hustle

While launching an airline into the teeth of the industry’s worst downturn might seem reckless, there is some logic to it. Financing remains cheap, and the pandemic has created a huge fleet of grounded planes, many owned by leasing firms desperate to find new operators.

Plane makers are also seeking buyers for brand-new aircraft following order cancellations – Boeing’s 737 Max in particular, as the model returns from a 20-month grounding in the wake of high profile crashes. Incumbents have cut capacity and thousands of jobs, providing would-be rivals with a glut of experienced staff, while high debt levels limit their ability to fight back.

Cyrus Capital aims to revive Britain’s Flybe after buying the brand from administrators, while newly founded Emerald Airlines has won a contract to provide regional flights for Ireland’s Aer Lingus. Oslo-based Flyr, set to launch in coming months, wants to pick up traffic from Norwegian, and the founders of PT Lion Mentari Airlines are said to be planning a start-up in Indonesia.

In North America, Canada’s Flair Airlines aims to expand from three jets to 50 under a new brand and management, while in Miami, Global Crossing Airlines, flying as GlobalX, plans to operate charter flights to Latin America.

South African lessor Global Airways helped launch discounter Lift on December 10 with its own surplus jets, indicating a possible new direction for finance firms stuck with idled planes.

Brave new world

Just as long security lines, removing your shoes and limits on liquids have coloured the post 9/11 experience of air travel, Covid-19 is likely to herald continued use of masks, social distancing and apps for passenger records. Passengers are likely to demand airlines maintain their current high levels of hygiene, which could effect profitability.

One major change that’s becoming part of the landscape is the introduction of pre-departure tests for Covid -19. Carriers had been pushing for the step as a way to encourage travel for months with little success before the detection of a new strain of the virus in Britain forced governments into a rethink. France and other European nations demanded screening for all British passengers, while Hong Kong and other destinations banned flights from the UK altogether.

Scott Sunderman, managing director for medical and security at testing specialist Collinson Group, reports a surge in demand at London Heathrow airport after carriers including British Airways and Virgin Atlantic Airways made checks mandatory for US-bound flights – a policy the US is itself considering for flights coming in from abroad. 

  On the positive side, many airlines have eliminated change fees, and refunds could get easier after an outcry when cash-strapped carriers held on to revenue for cancelled flights. Improvements to processes for boarding and check-in are also likely to become permanent.

Additional reporting by staff reporter