[Forbes]

Passengers are gaining remarkable deals as travel restrictions ease and flights resume in many parts of the world. Fare discounts and only partially filled planes are common, but some airlines are offering bigger incentives.

Among airlines’ offerings are promotions covering unlimited domestic flights for $93 through next March, 50% bonus on gift cards, and discounts for passengers not needing a blocked middle seat.

One of Asia’s best-known low-cost carriers, AirAsia, is selling $93 passes that give unlimited flights through March 2021 in its domestic Malaysian network.

AirAsia co-founder Tony Fernandes praised his colleagues for coming up with the pass, but also noted wider economic benefits.

“The unlimited offer is an incredible idea and a great opportunity to help the Malaysian tourism industry,” Fernandes said in a video to customers.

Etihad Airways is kick-starting its resumption of service with a global offer. Passengers who buy vouchers/gift cards for at least $250 will receive a 50% bonus. A normal $1,000 gift card would have a value of $1,500. Etihad is offering the bonus all the way up to purchases of $65,000. The two-year validity to use the stored value is more generous than some vouchers or deals valid for a year or less.

Blocking middle seats for passengers who live together did not make much sense to Air New Zealand. So it created discounts for families or other passengers travelling within their “bubble” that were willing to sit together without empty middle seats.

A third passenger in the group could take the middle seat instead of needing a seat in another row. That extra seat could be sold to another passenger.

Air New Zealand ended the offer once COVID-19 restrictions eased in New Zealand and middle seats were no longer blocked. But the premise could be replicated by other airlines as they resume travel, although Air New Zealand is known for innovating – and implementing – faster than other airlines.

The middle seat group sale is relatively straight forward. What about the other offers?

Most Etihad passengers do not live in the airline’s home of Abu Dhabi. All airlines are reviewing where they will fly in coming years, and Etihad was scaling down before COVID-19.

Etihad’s voucher bonus is generous – perhaps unnecessarily high – but passengers have to be sure Etihad in the future will still fly to their home city and prospective destination.

EDITORS’ PICK|7,721 views|Jun 14, 2020,06:38am EDT

Unlimited Flights For $93, Airline Gift Cards With 50% Bonus, Discounts: How Travel Is Resuming After COVID-19 Restrictions Ease

Will HortonSenior ContributorAerospace & DefenseMore From ForbesNASA’s TESS Mission Finds Earth-Size Planet Within Habitable Zone Of StarTOI 700 d orbits within the hbaitbale zone of a star and may have the conditions necessary for life.

PauseUnmuteCurrent Time 0:29/Duration 1:10Loaded: 55.93% Fullscreenx

Passengers are gaining remarkable deals as travel restrictions ease and flights resume in many parts of the world. Fare discounts and only partially filled planes are common, but some airlines are offering bigger incentives.

Among airlines’ offerings are promotions covering unlimited domestic flights for $93 through next March, 50% bonus on gift cards, and discounts for passengers not needing a blocked middle seat.

One of Asia’s best-known low-cost carriers, AirAsia, is selling $93 passes that give unlimited flights through March 2021 in its domestic Malaysian network.

ADVERTISING

Ads by Teads

AirAsia co-founder Tony Fernandes praised his colleagues for coming up with the pass, but also noted wider economic benefits.

“The unlimited offer is an incredible idea and a great opportunity to help the Malaysian tourism industry,” Fernandes said in a video to customers.

Etihad Airways is kick-starting its resumption of service with a global offer. Passengers who buy vouchers/gift cards for at least $250 will receive a 50% bonus. A normal $1,000 gift card would have a value of $1,500. Etihad is offering the bonus all the way up to purchases of $65,000. The two-year validity to use the stored value is more generous than some vouchers or deals valid for a year or less.

Blocking middle seats for passengers who live together did not make much sense to Air New Zealand. So it created discounts for families or other passengers travelling within their “bubble” that were willing to sit together without empty middle seats.

A third passenger in the group could take the middle seat instead of needing a seat in another row. That extra seat could be sold to another passenger.

Air New Zealand ended the offer once COVID-19 restrictions eased in New Zealand and middle seats were no longer blocked. But the premise could be replicated by other airlines as they resume travel, although Air New Zealand is known for innovating – and implementing – faster than other airlines.

The middle seat group sale is relatively straight forward. What about the other offers?

Most Etihad passengers do not live in the airline’s home of Abu Dhabi. All airlines are reviewing where they will fly in coming years, and Etihad was scaling down before COVID-19.

Etihad’s voucher bonus is generous – perhaps unnecessarily high – but passengers have to be sure Etihad in the future will still fly to their home city and prospective destination.

AirAsia is already the dominant airline in Malaysia with 60% market share. But AirAsia’s pass is for unlimited travel on promotional flights – not all. As with frequent flyer mile/point redemptions, there is no guarantee seats will be on offer.

“AirAsia flight redemptions are limited and may not be available for all flights during public holidays, school breaks and weekends,” the airline says. “The pass does not guarantee availability on any particular flight.”

This offer seems more rationale than Etihad’s. Dangling the large bonus may help Etihad quickly earn large sales, rebuilding cash flow when airlines are still weak. But short-term wins have to balanced with possible long-term revenue dilution.

AirAsia can limit inventory and offer available seats on flights unlikely to sell out, or which would need steep discounting. Flights booked with the pass have to be reserved no less than two weeks before departure, so early booking allows AirAsia to manage expectations and hold seats for higher-paying last minute passengers.

AirAsia, Asia’s largest budget carrier, is optimistic about launching an airline in Japan next year as the tourism market is “exploding”, Group Chief Executive Officer Tony Fernandes said last week.

The pass is only for the base fare. Besides taxes and charges, passengers will have to pay for any ancillary items from checked baggage to seat assignments and meals.

Ancillaries are typically higher-margin than base fares. They are a substantial part of AirAsia’s business, comprising around a quarter of revenue. This is higher than at full-service airlines, so they have different economics if considering an unlimited pass.

AirAsia’s average fare for domestic and international flights last year was $39. Including ancillaries, unit passenger revenue was $49. Taking two round-trips would, to use a simple average, more than pay for the $93 pass.

“Unprecedented” is commonly used to describe how travel nearly halted in response to coronavirus. That is also a characterization for the deals some passengers will receive through careful research and planning, but also luck.

By Will Horton