If you're eager to grab that summer bargain, then now may be the time to book your tickets as airfares are expected to rise by nearly 20 per cent from mid-May, while demand could increase by 10 per cent.

A renewed interest in leisure travel, coupled with capacity cuts and rising fuel prices is expected to give the aviation sector that much-needed boost post 2009, which saw the industry incur losses of about $9.4 billion (Dh34.5bn) according to the International Air Transport Association (Iata).

While some analysts were predicting more than a 30 per cent rise in summer fares compared to the same period last year, sluggish demand in corporate travel has kept fare prices in check.

"Airfares have not witnessed too big a jump in comparison to 2009, but we do see demand picking up on some sectors, especially routes such as Cairo, which are almost sold out," Samer Ascha, General Manager, Sky Line Travel, Tourism and Shipping, told Emirates Business.

"Even though it's too soon to predict the full picture, we can anticipate an increase of nearly 20 per cent."

Ghassan Aridi, CEO, Alpha Tours, makes a more conservative estimate, saying: "I don't think airfares would rise more than five per cent compared to last year. The economic crisis has not cleared yet, and people are still hoping for a last minute bargain." However, last month, Iata offered a more optimistic look for the airline industry based on increased demand. The industry trade group predicted a 5.6 per cent increase in passenger demand this year, compared to a 2.9 per cent decline last year.

"Demand in the UAE has certainly risen compared to last year," said Aridi. "I would rate the jump by 10 per cent at least."

Price is right

A recent survey conducted by online booking engine, Travelocity.com, provided a solid indicator on increasing demand and prices, since it is based on actual tickets purchased, not on advertised prices. Three factors were integral to driving airfare price increases for the summer, said Travelocity.com Senior Editor Genevieve Shaw Brown in a statement.

The capacity cuts that have taken place over the last year mean fewer available seats and more competition, which ultimately leads to higher prices. The second is pent-up leisure travel demand. Many people put vacations on hold in 2009 and are now ready to take advantage of the deals available.

The third is lower hotel prices. Airlines benefit from lower hotel rates, which make the total cost of a trip lower, even if fares are higher. Overall, hotel rates are down 12 per cent from 2008, Brown said.

Online booking agent Priceline.com echoed the statement, expecting the average airfare could rise by as much as 25 per cent.

"Airline capacity and routes flown are still down compared to recent years," said Mark Koehler, Priceline's Senior Vice-President, Air, said in a statement. "We haven't experienced the widespread, aggressive airfare sales seen a year ago."

Yet, even as a jump in demand comes into play globally, the UAE is traditionally a market that is driven by last minute travel plans. To boost early demand and catch up to this global average, many carriers are now offering added incentives that include the chance to bag 2009 prices.

Ascha said: "Almost 80 per cent of this a market is driven by last minute bookings. To encourage early demand, we are currently running promotions where passengers have the opportunity to book flights at last year's prices for the summer period. However, airlines will only release a limited number of seats at bargain prices.

"Once demand rises, the more expensive seats will find its way on to the market. Plus, emphasis will also place more restrictions on fares, following the global system of travelling. If you want to change your travel date, you pay a penalty."

Cost-effective vacations

Alpha Tours' Aridi is expecting cheaper vacations to rule the leisure market this year. "Many families are looking to the Far East this summer, especially countries such as Malaysia and Indonesia. Traditionally, Thailand has always been a busy route, but due to the ongoing riots in the country, we can expect cancellations on the few who have already booked."

"Middle East travel is another big one to emerge this year. Families are looking to holiday in their own backyards, where it's not time consuming, and much cheaper," he added. Egypt is already booking out according to Ascha, with Syria and Jordan also looking up. India is also expected to feature prominently on travel plans this year, as Shakir Kantawala, General Manager for Jet Airways Dubai and Northern Emirates, said: "During last year's crisis, many expat families that cancelled their summer travel plans should take to the skies again this year. We are already noting a 10 per cent rise in demand."

Keeping airfares to India in check are also new players in the market, such as the Bangalore-based Kingfisher Airlines, which launched its services between Dubai and the popular Indian cities of New Delhi, Mumbai and Bangalore, recently.

"Yes, there could be an increased capacity this year with Kingfisher also vying for demand, but traditionally, capacity on such popular routes has always increased over the summer period as airlines add new flights to keep up with demand," said Kantawala.

"Plus, we need to factor in that in 2009 airlines scaled back seat capacity, which have not been added back. Any new players will simply bump the numbers back up to the yearly average," said Kantawala.

"Many national families are still vacationing and want the best in their travel plans, but may experiment with newer destinations that are more cost effective," added Ascha.

"Munich is looking very popular this year for the very reason, while markets such as Spain and Italy are under performers."