Air fares “bonanza†forecast on back of record airline losses
Thursday, 21 May, 2010
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Air fares are likely to be cut this summer as loss-making airlines seek to attract passengers back.
The prediction came from Bob Atkinson, travel expert at travelsupermarket.com, as he responded to the second successive record annual financial losses by British Airways.
"Today’s record loss of £531 millioncomes as little surprise and shows just how difficult business is for airlines at the moment,” he said.
“However, compared to the euro 1.5 billion loss posted yesterday by its competitor Air France/KLM, BA is performing well, especially considering the impacts of snow chaos and strikes in the last two quarters of the financial year.
“From the customer’s point of view, we are highly likely to see a fares bonanza in the summer months and through to the autumn as airlines battle to get bums on seats.
“Air France/KLM stated yesterday that they will sell seats more cheaply this summer, so BA will no doubt react once strike action is over.
“In the immediate term, the most important thing for BA and its customers is an end to the strike action as soon as possible.
“They must get things back to normal to end the uncertainty over booking and reinstate confidence in the brand, which has been severely tarnished.
“Finally, we need to see the completion of the Iberia merger and the transatlantic deal with American Airlines and Iberia.
“If BA can make these mergers work there is strong potential for the alliance to deliver a more streamlined product for fares, schedules, connections and frequent flier benefits – making travel easier and more rewarding for customers travelling across the airline’s networks."
by Phil Davies
Phil Davies
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