Belfast Telegraph

Thursday 24 July 2014

Is this the end of cheap flights?

Holidaymakers face huge hikes in ticket prices as rising fuel costs and airport taxes make flying more expensive

Families in Northern Ireland are facing record fare rises as airlines pass on rocketing fuel costs and soaring taxes, it has emerged.

The warning comes after Ryanair announced a massive 12% hike on its ticket prices, with travel industry experts predicting that other companies will follow suit, potentially signalling the end of cheap flights.

To put the increase in context, the rise would see £300 added to a holiday in Florida for a family of four, while a Spanish holiday would cost £100 extra.

For Ulster families travelling via an English airport, the expense will, of course, be even higher given the domestic leg of the journey.

For example, after checking the Easyjet website on Friday, this newspaper found it cost at least £300 to fly a family of four from Belfast to London Gatwick.

Easyjet chief executive Carolyn McCall warned that foreign holidays were "taking a hammering from the Government", which she said was unfair on hardworking families.

She added that they would soon become a luxury that only the privileged could enjoy as the UK is one of the only European countries to tax air passengers.

Ms McCall said there was a limit to how far even budget airlines could keep costs down against a backdrop of high oil prices and taxes.

"I think fares will rise inevitably because you have to pass on the cost of fuel some way," she said.

"All airlines will have to do it. All prices will rise."

British Airways boss Willie Walsh said fuel costs had soared by 35% and the company's fuel bill this year would be £4.47bn - a third of its total costs.

Of a return ticket to Orlando in Florida costing £600, £340 is basic fare and £260 is made up of fuel, APD (Air Passenger Duty, £70) and local taxes.

A 12% hike could see the fare rise by £72 - or by £288 for a family of four.

If that family happens to live in Northern Ireland, where there are limited direct flights to far-flung destinations, the cost of initially getting to another UK airport must also be factored in.

Last week, Ryanair chief Michael O'Leary (right) called for Northern Ireland to be exempted from APD, adding that it was doing "untold damage" to the province's travel industry.

He added: "We believe there should be no tax for people visiting the island of Ireland, north or south." Aviation tax in the Republic is a mere €3, and their cheaper flights are driving Ulster travellers south of the border.

It is also threatening the province's only regular US-bound service, the Continental route between Belfast International and New York/Newark.

With APD set to increase to double the rate of inflation next year, there is little cheer on the horizon for local holidaymakers.

Leading retail expert Donald McFetridge said it was clear that Northern Ireland families have been hit by substantial hikes in the amount they pay for air fares.

"If Ryanair is putting up prices by 12%, others will not be far behind," he said.

"It means that more than ever families will have to shop around for the best deals.

"Quite often we have to travel to America via London or Manchester which bumps up the cost of holidays and will continue to do so unless certain issues, namely aviation tax, are addressed."

Background

Air Passenger Duty (APD) was first imposed on flights in November 1994, ranging from £5 for economy class flights across Europe and £20 for flights across the rest of the world, up to a maximum of £40 in other classes. But since then the tax has soared - under the label of being a 'green' environmental tax - so now it ranges from £12 economy class in Europe up to £85 for long-distance economy journeys across the rest of the world and £170 for the longest journeys in other classes.

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