17 May 2002

Fares may rise after airline takeover

By Paul Marston, Transport Correspondent

Fares on some routes served by no-frills airlines could rise following Easyjet's takeover of Go, consumer groups warned yesterday.

The merger - making Easyjet the largest low-cost airline in Europe - will leave the company as the only low-cost operator on seven routes. Analysts expect the company to reduce flight frequencies and restrict the availability of its cheapest tickets.

The deal comes at a time when the budget airline sector is booming. EasyJet, Go and Ryanair have left national carriers in their wake, attracting a host of leisure and business customers through heavily discounted fares.

The enlarged Easyjet will have 63 planes compared with Ryanair's 44 and a turnover of almost £590 million, £210 million more than Ryanair.

It will also serve around 32 different destinations by next summer, ranging from Athens and Bilbao to Prague and Inverness. The Go brand will disappear, with the first flights by the enlarged Easyjet due to take off next March.

Warnings of raised fares were dismissed by the airline, which said that because of its increased size, it would be able to make savings on purchases of fuel, insurance and aircraft.

Stelios Haji-Ioannou, Easyjet's founder, said he believed fares would remain "at the same average level".

Company officials admitted that the three busiest domestic routes, from London to Edinburgh, Glasgow and Belfast, had been "a bit of a blood-bath" and were likely to see services cut and ticket-prices raised.

The Consumers' Association said: "The downside is that we will see less competition on the routes where the two carriers currently overlap."