THE price benefit of flying with budget carriers is
disappearing, research by American Express has revealed.
The price gap between full fare and no-frills airlines
is rapidly eroding according to the business travel company, after network
carriers slashed prices to compete.
The company predicts prices will “bottom out” during
2004, meaning consumers may have seen the last of the low-cost heyday.
Speaking at the Business Travel Show at Olympia, Amex
director of industry affairs Bernard Harrop said: “People are now used to low
prices so they are starting to ask, ‘what else do I get for my £50?’. People
are starting to question the benefit of flying with budget carriers.”
Amex research found no-frills prices from London to
Dublin and Paris has risen from 65 euros and 78 euros respectively in the
second quarter of 2003 to 221 euros and 175 euros in the third.
The company claims prices are likely to rise further
with the new European Union rules requiring airlines to give guaranteed
payments for excessive delays or passengers bumped off flights.
The company now advises clients on the total cost of a
trip, such as the time it takes to get to airports from their office and the
cost of getting to the city centre from destination airports.
“If a consultant is on £200 an hour and he has to travel
two hours to an airport just to save £20 on a flight, it doesn’t make
sense,” said Harrop.