Air fares expected to rise as costs hit

And fares could go up by a further 11.5 per cent in 2011, sending the average cost of a London to New York economy class ticket up by 62.

The figures, published yesterday, came from a report by the Centre for Economics and Business Research produced for e-commerce company Kelkoo.

It put the cost to airlines of the ash-induced northern European airports' shutdown at around 1.3bn by the end of last week.

The report said it was reckoned that up to two-thirds of the cost of the volcano crisis would be borne by the European airlines, having a significant impact on their profitability this year.

This might lead to an increase in air fares as airlines tried to mitigate the impact on their already tight profit margins.

Kelkoo UK managing director Bruce Fair said: "Most airlines were already struggling prior to the crisis, but this, combined with soaring oil prices, will have a knock-on effect on consumers as carriers are forced to pass on rising operational costs to passengers."

Meanwhile, a survey by hotel price comparison site trivago.co.uk showed that overnight accommodation prices rose sharply during the ash cloud crisis.

The average price of a hotel night stay in London during the period April 15-22 was 205 a night compared with an expected average of 138 – a 49 per cent rise, the survey found.

Berlin hotel rooms were 63 per cent more expensive.