Higher fares set to squeeze air travel growth

Travellers face higher fares in coming years as green taxes and aircraft shortages increase the cost of flying, an Irish aviation group said on Tuesday. Aircraft lessor Avolon predicts that the number of passenger planes in the world will almost double to 46,880 as demand for travel continues to increase. Passenger demand will rise by around 3.5% annually, says the company’s World Fleet Forecast, published on Tuesday. Avolon predicts, however, that environmental taxes and a shortage of aircraft will boost air fares so expansion will lag the 5 per cent to 6 per cent rates of the last two decades. The report blames the slow recovery in aircraft production for the shortage. The lessor also notes that there will be less scope to deregulate markets, which helped drive growth over the last 20 years.<br/>