More choice brings premium fares down

2008-04-18

A new age in transatlantic air travel is near - meaning there’s more choice if you want to hop over the pond.

But will it drive prices down? Opinions are mixed. The number of seats on offer this year on flights from Heathrow to north America could rise by more than 20 per cent on 2007 figures.

That’s a result of the open skies agreement that allows full competition between airlines from Heathrow from March 30.

Previously only four airlines - two from the UK and two from the USA - flew from the London airport: British Airways, Virgin, United Airlines and American Airlines.

Now other airlines that include Continental, Delta, Northwest, US Airways and Air France-KLM will launch services.

BA is moving its transatlantic operation to the newly opened Terminal 5 and launching a dedicated subsidiary called Open Skies. It will also offer business-class-only flights to New York from London's City airport.

But Virgin is more cautious and is holding back from expanding its services - warning that the changes may not see reduced fares.

Chief operating officer Lyell Strambi feels fares on the London to New York route will not fall significantly. He said: “"I think phase one of open skies will be something of a damp squib.”

Some industry analysts say premium rather than economy fares are the most likely to fall.

One in four people who travel between Europe and the USA travel via Heathrow.