Due to the rising costs of fuel and the decline of passengers traveling in business and first-class, which provide the highest amount of revenue for carriers, airlines are looking at ways to cut costs — and your in-flight free booze might be the first thing to go.
Due to cost projections for 2017, the current standard “freebies” (which are never actually free, they are just worked into the cost of tickets) offered on many long-haul flights, including booze and meals, may no longer be sustainable for some big name carriers.
In addition to cutting F&B service, other possibilities for staying profitable include cutting certain routes or the number of flights on each route, swapping out older, gas-guzzling planes or, of course, raising prices, reported Bangkok Post.
Carriers are especially worried after learning of news from the Organization of the Petroleum Exporting Countries (OPEC) on Nov. 30 which said that fuel costs will likely see a 30 percent increase. Fuel to keep the planes running is the biggest operating expense for airlines.
Though this will affect airlines worldwide, Asian carriers will feel it the most since the introduction of many cut-rate carriers in the region has forced prices down across the market. This means that their profit margins are as low as half of what they are for some Western airlines.
Though services such as food and drink, checked bags and in-flight entertainment have become standard on long flights, that may change.
According to one expert, Neil Hansford, chairman of Australia’s Strategic Aviation Solutions, premium airlines such as Cathay Pacific are going to have to start charging for these formerly free services if they hope to turn a profit.
Cathay Pacific, specifically, is Asia’s largest international carrier and has suffered an 82 percent crash in income for the first half of 2016.
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