The U.K. is planning to raise its prices on a variety of premium travel items as it tries to compete with airlines that offer the cheapest fares, a senior executive at one of the country’s biggest airlines told investors on Thursday.
The decision comes after the British government said it would require airlines to increase the prices of its standard economy and business class seats, a move that will raise the cost of the seats for many people.
The new cost will come into effect on Feb. 1, 2018.
The move comes as airlines are looking to attract more customers, including young and frequent flyers, who increasingly have to spend more to buy a ticket.
Some U.KS. airlines already offer the same prices as their U.A.E. counterparts, while others are planning to increase prices.
U.K.-based Delta Air Lines Inc. said Thursday it would raise the price of the business class seat by up to 5 percent, with flights to London, Paris and Los Angeles.
The airline said it is already offering the same fare to customers who buy its standard and business classes.
Delta also plans to raise prices for the business and standard economy seats in London, London Heathrow and Gatwick airports.
Delta said the hikes are the result of a number of factors including “significant cost pressures” and “an oversupply of seats.”
U.S.-based United Airlines Inc. on Thursday said it will raise prices of business and economy seats by 5 percent.
United Airlines and Delta both said they expect to raise fares on some premium flights in the coming months.
UBS analyst Paul M. Gorman said that the cost increases are likely to have a large impact on U.k. airlines, which have struggled to compete against airlines that provide the cheapest flights.
“This will be a very difficult situation for U. K. airlines,” he said.
Gorman said U. S. airlines have been struggling to compete as their rivals have expanded their offerings.
“This is going to be a challenge for them, but it is also a good thing for them,” he added.
United Airlines is already increasing prices of seats for some of its larger flights, including some of the most popular routes.
British Prime Minister Boris Johnson announced last week that British Airways would raise prices on some of Britain’s most popular flights by up and up.
United Airlines also has been raising prices of some of it’s business class flights in recent months.