AIR FARE will start to rise across the industry as the rocketing cost of fuel begins to take its toll, British Midland executive chairman Sir Michael Bishop warned.
Speaking at a Travel Weekly lunch in Cairns, Sir Michael refused to predict the scale of any British Midland increase but said rises of 3% are already being seen on other carriers.
He also said that intense lobbying from environmentalists, who claim airlines should not be exempt from paying tax on fuel, could also damage the industry.
“Price increases are starting to creep through the industry largely due to the increase in fuelÊ- particularly in the last three months,” said Sir Michael. “We just can’t sustain a price freeze and will start to see rises before too long.”
Sir Michael also predicted the days of rock-bottom prices from the no-frills airlines would soon come to an end.
“Carriers have been selling one pound for 20p. I believe the honeymoon will soon be over,” he said.
In addition, Sir Michael , who is also deputy chairman of Airtours, refused to be drawn on a change to agent commission levels, which currently stand at 9%, or whether British Midland will rebrand.
Research over a possible rebrand is about to be completed which will then be reviewed.
But Sir Michael did reveal that after attending bilateral talks in Chicago he was optimistic of being given the all clear to start transatlantic flights from Heathrow and Manchester.
Earlier, Sir Michael criticised attempts to limit the growth of the airline industry.
“We need to lift this cloud of oppression from those who want to cap our activities,” he said.