No-frills tycoon Franke says low air fares no panacea for COVID-19 crisis

Budget airline backer Bill Franke, who pioneered rock-bottom fares topped up by optional charges, says slashing prices alone will not be enough to get people flying again as carriers try to inch back to profitability after the coronavirus shutdown. Airlines will need to make passengers feel their health is secure before they get back on planes as the economy slowly stirs back to life, he said. "In the early days the passenger won't be motivated by the price of the ticket. They'll be motivated in large part by their own personal safety," said Franke, whose investment firm is the driving force behind several low-cost carriers worldwide. "The traditional 'we'll just sell seats cheap' - it doesn't really work here," said Franke, chairman of US budget carrier Frontier Airlines, Chile's JetSmart and Hungarian Wizz Air. The founder of private equity firm Indigo Partners, which has thrown its weight behind the practice of "unbundling" fares to let people pay only for what they use, is also a board member of Mexico's Volaris Airlines and chairs a Canadian startup. Franke said the early objective for airlines' financial recovery will be to break even on cash flow, which means recouping immediate expenses. "Then to start creating profitability - some increment above the cash required to pay the bills, and eventually trying to work your way back to the demand we saw in 2019. My view is that it will take 1.5-2 years to get back," he said.<br/>