The deteriorating economic outlook means more airline failures are likely.

Aviation analyst Chris Tarry predicted “a real impact on discretionary spending” and said: “The worst is yet to come. We must not be deluded that things will get better because the oil price has come down.”

Oil was $109 a barrel in midweek, following a record high of $147 in July. But the price of jet fuel remains 80% up on a year ago.

Tarry said: “People’s behaviour will be conditioned by feeling things are getting worse. It will impact on demand and what customers are prepared to pay.”

Monarch Airlines managing director Tim Jeans said: “The exchange rate is beginning to hurt. People have come back from holidays in Europe saying, ‘that was expensive’.

“Fuel-hungry sectors of seven to eight hours are hardest hit. The economic indicators look fairly grim.”

However, he said “Most people are not yet worried about losing their jobs. Fares will go up, but not by so much that people say ‘I cannot fly’.”