In an attempt to contain coronavirus, governments all across the world have imposed various travel restrictions. As it usually happens, the road to hell is paved with noble goals and good intentions. The airline industry that has made travelling between continents and cities more pleasant, time-efficient and affordable will, unfortunately, be hugely affected by these travel bans.
In fact, the potential damage may end up being so extensive that some legacy and low-cost airlines will cease to exist and cheap tickets will only be a sweet memory from the past. This would be disastrous for consumer choice.
Not all is lost though. There are a number of ways in which governments can help the industry during these trying times. Bailouts usually come first to mind. Airlines for America, the industry association for various U.S. airlines, has already asked for 50bn USD in support. Many more are likely going to follow.
As the government is partly responsible for the upcoming downfall of airlines, it is understandable why airlines would seek its assistance in mitigating the damage. However, every bailout is a redistribution of taxpayers’ money without their consent. Do all taxpayers want their money to be used for saving bankrupt airlines? Have all of them travelled by plane at all? Or maybe they are more concerned with the threats posed by the pandemic and would prefer the government to channel their money into healthcare services? Probably the latter would make more sense given the current situation.
Once travel restrictions are lifted, consumers and passengers are going to be very happy to travel again. And in order to catapult the demand, governments should reduce taxes imposed on the tickets we buy. Not only will this help boost an industry without the need for bailouts, but it will also allow passengers of every income group to visit their families, attend meetings, and travel without any additional barriers.
Every tax imposed on airlines makes the price of flying higher for consumers. Never believe it when governments say they are taxing airlines: it’s actually us consumers who foot the bill. And once the pandemic is over, our subjective value of travelling without limits will increase thus making us appreciate the miracles of air travel way more. We will want to fly more not less. Incentives in the form of lower prices – thanks to lower taxes- will be good news for every consumer.
We’ve started taking flying and travelling as such for granted, and the globalisation that was fostered by it has come under fire in light of the coronavirus outbreak.
But these temporary bad times shouldn’t make us forget about the possibilities of air travel. Many of us are quarantining these days and feel trapped inside the four walls of our apartments. Skimming through our pictures from past travels and daydreaming about being able to visit more places makes it more bearable.
When all this ends, we will want governments to ensure we can fly just like before, and as cheaply as possible. No need for bailouts, just lower flight taxes. This will make our post-coronavirus reality so much more enjoyable and guarantee a strong position for airlines for years to come.
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