AIR FARES to some of Europe's most popular destinations have rocketed up to 43 per cent since Ryanair cancelled thousands of flights last month and Monarch Airlines suffered an array of problems that eventually led to it collapsing into administration earlier this week.
The average price of a European flight ticket sold between 15 September and 2 October was 23 per cent higher compared to those sold between 25 August and 11 September, according to figures from travel website Skyscanner. Flight prices from Britain to Milan, booked after mid-September, were the most expensive, soaring 43 per cent from £74.46 to £106.39. Meanwhile, ticket prices to Malaga, Alicante and Dublin rose 30 per cent, 27 per cent and 25 per cent respectively. More than 2m passengers have been hit by travel chaos caused by the two airlines. Analysts expect fares to rise in the future as the industry feels the pinch from rising costs and excess capacity.
Aerospace analyst Howard Wheeldon said: "I do expect airline ticket prices to rise because the current model is unsustainable. Despite the demise of Monarch and the problems suffered by Air Berlin, there is far too much capacity. Meanwhile the shortage of pilots which has been long forecast is making itself felt.
Wheeldon added that Ryanair's issues are merely a precursor of problems to come, and that in a few more years' time the low-cost carrier's "problems will be repeated across other European airlines" as rivals in the Gulf offer higher salaries to pilots.
Alex Neill, managing director of home products and services at consumer rights group Which, said: "Ryanair's failure to inform people that they are entitled to be rebooked on another airline at no extra cost is leading to some passengers paying sky-high prices for alternative flights when the airline should be picking up the bill."
However, Russ Mould, investment director at AJ Bell, said UK consumers may face a spike in fares but prices will rebalance in the long-term.
"The collapse of Monarch on top of Ryanair's woes will undoubtedly have an impact on prices in the short term. In a very short space of time the number of flights available has reduced significantly and simple dynamics of supply and demand mean prices are likely to rise as demand outstrips supply.
"Ryanair is working hard to rectify its capacity issues and low cost rivals will be looking to snap up airport slots, routes and staff from Monarch, so over time you'd expect the market to rebalance itself because it is still a very competitive area."
This comes as Italy's civil aviation authority said yesterday it was preparing to impose sanctions on Ryanair over its handling of mass cancellations of flights last month.
(c) 2017 City A.M., source Newspaper