Air fares set to soar after volcano crisis

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The Independent Travel

The volcanic ash cloud crisis and soaring oil prices are likely to lead to a 5.2 per cent rise in air fares this year, according to figures published yesterday.

Fares are also predicted to increase by a further 11.5 per cent in 2011, meaning that the average cost of an economy class ticket from London to New York will rise by £62.

The figures came from a Centre for Economics and Business Research report, produced for the e-commerce company Kelkoo. It puts the cost to airlines of the ash-induced northern European airports' shutdown at around £1.3bn by the end of last week.

The report said that up to two-thirds of the cost of the volcano crisis would be borne by European airlines, having a significant impact on their profitability this year. As a consequence, it is expected that this may lead to an increase in air fares as airlines try to mitigate the impact on their already tight profit margins.

"Most airlines were already struggling prior to the crisis, but this, combined with soaring oil prices, will have a knock-on effect on consumers as carriers are forced to pass on rising operational costs to passengers," said Kelkoo UK managing director Bruce Fair.

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