Is the era of cheap air travel ending? This week brought two typically contrasting answers. Willie Walsh, British Airways chief executive, insisted on Friday that fares must rise sharply to reflect higher fuel costs. Days before, Michael O’Leary, the iconoclastic boss of Ryanair, was placing a very different bet. Air fares were going to fall, he said, as he heralded the start of a new price war.

Mr Walsh, reporting an 88 per cent slide in first-quarter profits, said the industry must price $120-$140 a barrel oil into the business. In previous downturns, airlines would have quickly cut fares to try to fill more seats. “The old argument was that (with a little more passenger traffic) you cover the variable costs and contribute to the fixed costs. But that does not apply now.” With fuel now making up 40-50 per cent of the industry’s total costs, the variable cost was too high. So the medicine at BA is save costs where you can, rein in capital expenditure, take part in consolidation (the planned merger with Spain’s Iberia), but most immediately reduce the number of daily services and push up prices as far as you dare on remaining flights. At the same time manage the fleet for maximum fuel efficiency and buy new aircraft to replace gas-guzzlers.