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Mother Nature doesn’t like the aviation industry. The eruption of the Eyjafjoll volcano has cost European airlines over £2bn, eaten the savings of stranded passengers, and kept Scottish and Irish airports waiting almost three weeks for a break in the ash clouds.
Unfortunately, Eyjafjoll’s fumes could also force airlines to raise their ticket prices, as carriers such as British Airways and Ryanair bid to recoup millions of pounds lost during six days of cancellations in April. The news comes courtesy of Kelkoo, an online retailer, and the Centre for Economics and Business Research (CEBR).
Tickets from Heathrow Airport, for example, are expected to rise 5.2% before the end of the year, and then again in 2011, by 11.5%. The cost of a British Airways flight from London to New York will rise by £62 to an estimated £540, whereas routes to Spain and Greece will cost an extra £26 and £35, respectively.
Experts at the CEBR believe that airlines will have to find two thirds of the £2.15bn lost to cancellations in April and early May, with airports and operators picking up the slack. Fees incurred from repatriation efforts are expected to be huge. Last week, Bruce Fair, boss at Kelkoo, was feeling pessimistic, ‘Airlines were struggling prior to the ash crisis, but this, combined with soaring oil prices will have a knock on effect on consumers.’ Mr. Fair noted that oil prices jumped 74% in the first three months of 2010, and consequently, operating profits were ‘turning negative.’ The news will come as a disappointment to regular travellers.
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