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How airlines are coaxing customers back into the skies

CBS News logo CBS News 11/3/2020 Khristopher J. Brooks
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After a year of extreme turbulence brought on by the coronavirus epidemic, the airline industry is ramping up its incentives to travelers, with major airlines in the U.S. and abroad attempting to coax COVID-leery passengers into returning to the skies by offering 2-for-1 deals and other creative promotions. 

One airline is offering unlimited travel for a fixed price until March 2021, while another carrier recently ended a deal that allowed one passenger an entire row of seats for the price of one. Such sales gimmicks are part of a new aggressive tactic on the part of airlines to drum up demand and push passengers past their fears of flying in time for the crucial holiday travel season. 

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Simply put, airlines are desperate for passengers, one expert said. 

"There is a fear of flying right now unless there's an urgency, and even businesses are cutting business travel," said Ahmed Abdelghany, who teaches airline management at Embry-Riddle Aeronautical University. "Airlines are hoping they can break the fear by offering good incentives and lowering the ticket prices."

Alaska Air Group had a buy one, get one promotion, which ended October 31, in which customers who bought one ticket could get a second ticket on the same itinerary for just the cost of taxes and fees. Alaska Air marketed the deal as a way for customers to get an entire row of seats to themselves, as middle seats were blocked for social distancing for the same duration as the promo. Alaska Air declined a request for comment about the promotion. 

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Malaysia's largest airline, AirAsia, is currently offering unlimited flights within the country at a fixed price "to stimulate and revitalize Malaysia's domestic tourism," according to a company statement. 

Ireland-based Ryanair is giving customers a buy one, get one free ticket on flights across the United Kingdom. It is the first time the budget airline has ever offered such a promotion. 

Such incentives bring in a small amount of revenue, but the true goal behind the deals is to get people talking about their flights after the fact, Abdelghany said. Airlines are hoping that recent passengers will tell friends and family how clean and safe their trips were and slowly eat away the fear of flying that has taken over as a result of the pandemic, Abdelghany said.

As it stands, airlines have been decimated by the impact of the coronvirus on the travel industry, and continue to lose billions of dollars in revenue. Passenger air travel fell 70% in August compared to the same period last year, according to the most recent federal data available.

Airlines got a $25 billion bailout from the Trump administration seven months ago, but the industry's largest trade group still predicts a grim future for air carriers globally. 

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Bookings for all North American-based flights fell 53% in the first half of 2020, according to the International Air Transport Association. Revenue from passengers across all companies worldwide is expected to plummet by $314 billion, the trade group said.

Alexandre de Juniac, the trade group's CEO, said in a statement that next summer may determine the fate of many airlines. 

"The fourth quarter of 2020 will be extremely difficult and there is little indication the first half of 2021 will be significantly better, so long as borders remain closed and arrival quarantines remain in place," he said. "Without additional government financial relief, the median airline has just 8.5 months of cash remaining at current burn rates." 

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