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The price of air tickets should start coming down soon because of the world financial crisis, experts are predicting, while ruling out a plunge that would endanger the health of airlines.

Cut price airline Ryanair’s boss Michael O’Leary forecast a reduction in an average ticket of between 15 and 20 percent by the end of March, and claims to be attracting passengers from more conventional companies like British Airways.

Most airlines nowadays use the yield management system, whereby prices are adjusted by computer on an almost daily basis in line with demand, starting relatively low then rising if a particular flight fills up, or falling if it does not.

Few airlines have yet adopted an aggressive pricing strategy, as they try to recover from the massive cost of fuel which neared 150 dollars a barrel in mid-July, forcing them to slap surcharges on tickets.

While oil has now fallen to a third of this level, companies have held back from price-cutting at the same rate, while from time to time announcing a reduction in the surcharges since September.

source: AFP

Irish government opposition is weakening to Ryanair’s 750 million euro ($952 million) bid for former state airline Aer Lingus.

The government, which owns more than 25 percent of the loss-making flag carrier, opposed Ryanair’s 2006 bid for Aer Lingus, which was blocked by the European Union on competition grounds.

A spokeswoman for the transport ministry said it would not comment until Ryanair submits its formal bid for Aer Lingus. Europe’s biggest budget airline said on Thursday it would publish the formal bid within the next two weeks.

source: Reuters

The International Air Transport Association said that international air traffic fell in October, the second month in a row, and warned the airline industry is in a dangerous condition.International passenger traffic — measured in revenue passenger kilometers, which factor in how far passengers are flown — fell 1.3% from a year earlier in October, a less-steep decline than the 2.9% drop in September.

source: The Wall Street Journal

British Airways is in merger talks with the Australian airline Qantas in a deal that could create the world’s first global airline.

BA has also been discussing a merger with Iberia, the Spanish national carrier, and hopes to expand its alliance with American Airlines. The combination of the four would create the largest airline in the world which would be capable of carrying 198 million passengers a year – nearly six times BA’s current traffic.

Historically, the aviation industry has been highly fragmented, with each country trying to operate its own flag carrier and guard against competition.

source: Times Online

Lufthansa has launched an Italian subsidiary based in Milan and will begin services to the city four times a day from Heathrow at the end of March.

The German airline’s move comes as Italian carrier Alitalia remains in bankruptcy protection as it undergoes privatisation and a restructuring that will lead to a significant reduction in its network.

Lufthansa Italia will commence operations at Milan Malpensa on February 2 with a fleet of six aircraft. It will fly from Barcelona and Paris Charles de Gaulle to begin, adding services from Brussels, Budapest, Bucharest and Madrid in early March, and from Heathrow and Lisbon at the end of that month.

source: travelweekly.co.uk

The budget airline Ryanair is to make a fresh takeover offer for the Irish flag-carrier Aer Lingus. The all-cash offer would value Aer Lingus at 748m euros ($950m; £619m).

Ryanair’s previous offer for Aer Lingus, which valued it at 1.5bn euros, was blocked by the European Commission on competition grounds.

Other major shareholders include the Irish government and Aer Lingus employees, both of which rejected the takeover offer last time.

source: BBC

British airline Flybe is in talks to buy British Midland’s subsidiary operations bmi regional and bmi baby, the Mail on Sunday reported.

Lufthansa took over British Midland last month, but the German airline has indicated it is more interested in bmi’s long-haul routes and valuable Heathrow slots than in the two subsidiaries.

Bmi regional is UK-focused, while bmi baby is a low-cost airline that flies to a number of European destinations.

source: Reuters

Low-cost carriers topped the rankings of U.S. airlines for being on-time and uniting bags with passengers, while the big guys such as American Airlines brought up the rear.

Hawaiian Airlines was rated best at being on-time, at 92 percent for the January-June period. AirTran Airways was tops at handling baggage, and Southwest Airlines Co. best in customer complaints, at one for every 300,000 customers. JetBlue Airways had the fewest denied boardings.

AMR Corp.’s American Airlines was the worst in on-time performance, at just 63.2 percent. UAL Corp.’s United Airlines had the highest rate of customer complaints, seven times more than Southwest.

AMR’s American Eagle, a feeder airline for American, was the worst baggage handler, mishandling luggage more than three times as often as AirTran.

source: iht.com

British Airways is to resume flights to Riyadh and Jeddah, in Saudi Arabia, in March, after a four year gap in services.

The growing importance of Middle-Eastern investors to Western economies means the routes which British Airways abandoned in 2005, as oil prices started to climb, are now commercially viable.

Previously the routes had been dogged by security problems, with the airline having to suspend services at certain times in the years immediately after 9/11.

source: Times On Line

A New Zealand airliner crashed off the coast of France on Thursday afternoon and rescuers recovered two bodies from the Mediterranean Sea.

Five other people who were aboard the Air New Zealand (ANZ) Airbus A320 are missing and are feared dead. Aboard the ill-fated plane were a captain and three engineers of ANZ, an inspector of New Zealand’s Civil Aviation Authority and two pilots of German charter company XL.

source: AHN