Air fares to soar after court ruling

AIR fares across Europe will soar by up to 6% by 2008 because of the extra cost burden of airline passenger compensation, a Flybe boss has warned.

The European Court of Justice rejected an industry appeal against laws this month demanding airlines compensate passengers when flights are delayed or cancelled.

Flybe sales and marketing director Mike Rutter is adamant fares will go up.

“This ruling will have an upward impact on fares across all European airlines. People will be able to access compensation equal to seven times many of our fares and it will push fares up by 5% to 6% over the next two years,” Rutter said.

The regulations came into force last February and have been strongly opposed by low-cost airlines. Most think the rules discriminate against airlines because lead-in fares are often lower than e250 – the lowest cash compensation payment passengers can now claim when denied boarding due to overbooking.

However, Monarch Scheduled managing director Tim Jeans thinks fare rises, directly caused by the new EU compensation rules, will be ‘insignificant’.

Apartments Abroad managing director Ian Thirwall claimed dynamic packaging would not be impacted by the court ruling.

“This is an added expense everybody is stuck with in a very price-led market, but it’s at your own peril if you ignore your liabilities,” Thirwall said.

“The prudent carrier is going to build this into their budgets.”