Willie Walsh, British Airways boss, has warned that rising fuel prices, caused by a combination of government green taxes and the increasing price of oil, could spell the end for several cheap airlines.

British Airways will be increasing its prices this winter and will also consider closing less profitable air routes, according to Walsh.

Several airlines have already started to charge travellers for seat reservations, in-flight lunch, luggage or check-in and Walsh believes more will follow suit.  Indeed, he believes the rising prices could spell the end for cheaper, budget airlines.  Business only airlines, EOS and Maxjet, plus budget London to Hong Kong airline Oasis, have already gone bust and closed.

Mr Walsh said:

“I don’t think the industry can absorb the significant increases [in fuel costs]. The industry has no future if it doesn’t price in its costs. This is about survival.  The era of very low fares is behind us. It is clear many airlines out there are struggling today to survive.  We are going to see more airlines fail and that will take capacity out.  I think at some point demand will be affected by the increased prices.”