First it was high street stores – now airlines slash prices by up to 25%

Published on Tuesday 23 December 2008 20:42

AIRLINES have followed retailers by slashing prices early in an attempt to boost revenue after a sharp downturn in trade.

British Airways, Emirates and Virgin Atlantic are among carriers cutting up to 25 per cent from fares.

The seat sale is an annual event to try to fill aircraft in the traditionally quiet post-festive period. However, some observers said the price war might be fiercer than in previous years because traffic on some routes had fallen by 10 per cent.

Virgin Atlantic claimed fares on some long-haul routes were as low as when it launched 25 years ago. It is seeking to undercut BA by offering flights for 1 less than its rival.

The reductions come after the two airlines cut their fuel surcharges by one third last week in the wake of falls in oil prices.

BA has cut prices by up to a quarter on more than 75 routes – well over a third of the 184 destinations served.

Laurie Price, the director of aviation strategy at the analyst Mott McDonald, said: "These sales are just like those on the high street as airlines try to reduce what has been quite a significant downturn compared to last winter.

"Air traffic has been down by 10 per cent in some areas, so airlines are keen to stimulate demand and travel."

Brian Potter, the air convener of the Scottish Passenger Agents Association, which represents travel agents, said poor exchange rates were a concern. He said: "Air-fare price wars are usually found in January to March, which are quieter months. This time, however, the situation is made more worrying due to the weakness of the pound both against dollar and euro.

"I believe the airlines are doing their utmost to try to keep bookings positive during such a difficult period.

"The travel trade is trying to stay relatively positive about next year's bookings, and this first quarter will be a significant indicator of how things may go.

"The fuel surcharge drop is also helping fare levels, but people need to remember that only a few seats are available at these headline prices."

John Strickland, an aviation analyst at JLS Consulting, said: "Everyone is trying to get in early this year to compete for consumers' available income. This is something airlines normally do at this time of year, but it is particularly important for them now to get bookings in the bag and cash in the bank."

BA's offers include London-New York return flights for 259, a saving of 78. Virgin's fare is 258.

Other savings include Delhi from 359 (saving 121), Mumbai from 329 (saving 91) and Kolkata from 359 (saving 71).

Emirates has lopped a fifth of its flights, with a return from London to Dubai now 326, Bangkok 496, Beijing 390 and Hong Kong 412.

A spokesman for BA said: "The airline industry is facing a very difficult economic climate. We can't say this sale will make things better, but it certainly gives passengers more scope to take advantage of prices."

He said it was too early to tell how the exchange rate was affecting travel, adding: "America as a whole is still doing well."

A spokeswoman for Virgin said: "Passengers are the winners here. We always have a sale at this time of year, but the prices are some of the lowest ever seen."

BAA, which owns Scotland's three busiest airports and the three main London airports, has admitted 2009 will be a "similarly difficult year" to 2008.

Its passenger numbers fell by as much as 15.6 per cent at Glasgow last month, and the previously fast-expanding Edinburgh is now on the decline.

DISCOUNT DEALS

BA

New York 259 (saving 78)

Boston 279 (saving 79)

Philadelphia 279 (saving 69)

Washington DC 279 (saving 69)

EMIRATES

Dubai 326 (down 20%)

Bangkok 496 (down 20%)

Beijing 390 (down 20%)

Hong Kong 412 (down 20%)

VIRGIN

Dubai 298

Los Angeles 338

Delhi 359

Mumbai 329

Orlando, Florida 308

Chicago 288