Global Economics

Airlines Cut Fares to Boost Traffic


British Airways and Virgin Atlantic are dropping early 2009 prices to 20-year-lows in hope of tempting more passengers to travel abroad

British Airways and Virgin Atlantic both announced big fare cuts in their "January sales" promotions yesterday, sending prices spiralling down to almost 20 year lows.

Airlines hope to entice cash-strapped families considering cutting back on foreign trips next year as the economic conditions worsen, and reverse the trend of already falling passenger numbers. The discounts were made possible by the fall in the price of oil, which is down to $40 a barrel after almost touching $150 a barrel earlier this year.

The fare battle saw BA, which announced its worldwide sale yesterday, reduce the cost of flights to over 75 destinations providing customers book by January 27.

A return to New York between January and March will cost £259, while a trip to Hong Kong and back will cost £429 trip. A spokesman for the airline said prices were always under review, but added that the cuts were part of its traditional sales.

Virgin also announced it had lowered fares, some of which now undercut its rival by just a few pounds. Virgin's return fare to Hong Kong is £425, while travellers can get to New York and back for £258.

A spokesman for Virgin said: "If you take out the taxes and charges the fares are coming down to the levels of the 1980s. It's partly the oil price and partly to stimulate passenger numbers."

The reductions come against a tough backdrop for the industry. The Association of European Airlines reported that traffic in November dropped 4.7 per cent on the previous year. "A negative figure of this magnitude has not been seen since the Gulf War in early 2003, and is unprecedented for periods unaffected by external shocks," it said.

Provided by The Independent—from London, for Independent minds

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