Long-haul air fares to tumble
A NEW airline price war was signalled today, with fares set to tumble on flights from Heathrow to New York and Sydney.
British Airways will face new competition which is likely to result in far cheaper seats on both long-haul routes from next year.
Hong Kong-based Cathay Pacific was granted much-prized rights to operate on the lucrative transatlantic route between Heathrow and New York, currently dominated by four US and UK carriers.
At the same time, Virgin Atlantic has won the right to take on BA and Qantas on services to Australia.
Though prices have already been falling between Heathrow and New York's JFK, four major carriers dominate services on the route - BA, Virgin, American Airlines and United Airlines.
David Soskin, chief executive of online travel firm cheapflights.com, said: 'There is absolutely no question Cathay's entry into the New York market will lead to a fresh price war.'
Inter-governmental horse-trading also sees Virgin permitted to start operating services to Australia from London via Hong Kong. In return for the Hong Kong government giving the go-ahead for Virgin to fly through to Sydney, the British Government had to grant Cathay the coveted Heathrow rights.
Cathay is understood to be planning a daily London-New York service but its launch may be delayed by the need for approval from the European Commission. It will also have to acquire expensive and scarce take-off and landing slots at Heathrow.
