Air fares soar as airlines climb out of recession

11.8.2010   (Telegraph)

Passengers face higher air fares as the aviation industry climbs out of recession

By David Millward, Transport Editor

Already reeling from a wave of rises in aviation taxes, holidaymakers are also
facing sharp increases in the cost of the plane ticket itself.

The recovery in the industry was confirmed by the latest figures from Heathrow,
which showed that July was the busiest month in the airport’s history.  

Such is the recovery in the industry that airlines, which had been forced to
slash fares to fill empty seats, are now adding to their fleet to meet soaring

It means that planes which were grounded during the depths of the recession are
being pressed back into service and around 400 aircraft orders were announced
at last month’s Farnborough air show.

While rising demand is good news for airlines who had been complaining of huge
losses, it means that the two year honeymoon enjoyed by passengers is coming to
an end.

Figures produced by the International Air Transport Association, showed that
fares last month were 4.5% higher in economy class than they were a year ago.  
The rise in business class fares was even more dramatic, hitting 8.5%, as executives
started flying again.

A year ago the cheapest return fare to New York offered by a bucket shop was
£216 return. Now the same ticket is on sale for £258, an increase of £42 – of
which only £5 represents an increase in Air Passenger Duty.

The cost of a return ticket to Bangkok has gone up from £331 to £387 and Los
Angeles from £334 to £451.

“There is less capacity and because of the economic recovery people are travelling
again,” said Bob Atkinson, analyst with

Bargains, especially on long distance travel, will be harder to come by than
in previous years
, Mr Atkinson added.

Airlines are still being very conservative in their growth plans, so don’t expect
to see prices tumbling down.

“To get the best deal you need to book early and sign up for every email alert
from airlines and price comparison websites so you can be first in the queue for
any offers.”

The trend was confirmed by a spokesman for Virgin Atlantic. “Passengers have enjoyed record low fares for the past five years. Last year many of the very lowest fares were available, mainly because it was
at the height of the global economic downturn.

“By comparison this year fares are marginally higher as a result of industry
cuts last year leading to fewer flights and higher load factors on flights. However
consumers can still get very good value for money to many destinations around
the world by booking early. For example passengers can travel to LA for as little
as 5 pence a mile.”

The only crumb of comfort is that even now, air fares are still 15% lower than they were at the pre-recession peak.

Meanwhile the disruption caused by the Icelandic volcanic ash cloud led to a
doubling of complaints last year, according to the passenger watchdog, the Air
Transport Users Council.

In the period April to June 2010, it received 7,519 complaints and inquiries
– more than double the 3,086 figure for the same period last year.


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