Yahoo Finance Air fares will rocket, warns Lufthansa boss
Air fares are set to rocket as carriers pass the cost of the pandemic onto their customers, the boss of one of the industry's biggest players has warned.
Carsten Spohr, chief executive of Lufthansa, said that the crisis will reset the cost of holidays and business trips. He said: “I believe that prices were too low before Covid. €9 or £9 [for a flight] from the UK to Portugal is not healthy for the industry, not healthy for our environment,” he said.
Mr Spohr insisted that customers will be prepared to pay higher prices after being prevented from travelling for much of the last 18 months.
His warning followed comments by Ryanair chief Michael O’Leary last month, who warned inflation, higher taxes and fewer flights would drive up fares.
Mr Spohr said: “I think we see more disciplined players now because everybody took on debt. Lufthansa in the end probably has a $10bn bill of this whole Covid crisis. That's how much has cost us. So similar numbers for our competitors. So we all will be forced to be more disciplined.
“When we look at the pricing going forward, I agree with my friend Michael from Ryanair.”
Speaking as airline bosses gather in Boston for trade body Iata’s annual conference, Mr Spohr hit back at suggestions Lufthansa, Europe’s second-largest airline, had gained an advantage over British Airways by receiving billions of euros in state aid.
The German, French and Dutch governments stepped in by taking equity stakes in their flag carriers last year, in sharp contrast with the UK, whose support came in the form of loans.
However, Mr Spohr said that BA parent IAG had received state aid. A quarter of the FTSE 100 airlines group is owned by Qatar Airways, which supported a £2.5bn rights issue last year.
He said: “UK-based airlines have received government funds… in this case not from a local government but from a government 4,000km away."
