Brian Pearce, chief economist at the International Air Transport Association, believes the gap between the ordinary and luxury cabins will narrow dramatically on some routes.

"What we have seen is premium class fares falling much further," Mr Pearce said. "It is having a disastrous impact on airlines. They have seats at the front of the aircraft which they are desperate to fill." The collapse of the banks has been catastrophic for airlines who are also having to deal with growing reluctance of companies to pay several thousand pounds for a plane ticket. "There have also been signs that corporate buyers are changing their behaviour."

Traditionally a business class return to New York could cost as much as £4,500. But prices have, on occasion, dropped to below £1,500 and and at one point last year. At one point British Airways did a two for the price of one sale, which brought the cost of a business class return ticket to Boston down to just over £800. Experts believe that despite a modest upturn in premium traffic, there are likely to be more sales as airlines move to fill empty premium cabins.

"Business class travel on short-haul flights within Europe is virtually dead," said Lawrence Hunt, chief executive of Low Cost Travel. "On long haul we have seen revenue falling massively. "It is pretty easy to get a business class return ticket to New York for £1,500 now. Over the past year we have seen British Airways and Virgin Atlantic dumping seats with a series of offers, including two for one and that is going to continue."

With companies also driving a harder bargain for business class seats, airlines are also looking to cut costs as well as prices, Mr Hunt added. "People don’t want pyjamas and all the frills, they just want more leg room, to be treated like a human being by the staff and to get through the airport quickly."

According to Gert Zonneveld of Panmure Gordon stockbrokers there are also bargains to be had in "the back of the bus". He added: "People are not falling over themselves to buy economy class seats either." This trend was confirmed by Mr Pearce who predicted that the drop in fares is likely to continue in Europe and across the Atlantic, even though it will not be as steep as last year when the recession saw a fall of around five per cent.

Airlines have seen some recovery in demand for flying but it has been far weaker within Europe and across the Atlantic than in Asia, the Middle East and Africa. Carriers tried to keep fares up by grounding flights and cutting capacity. But, according to Mr Pearce, many are expecting to take delivery of new aircraft which will leave them with more seats to fill. "The age of cheap travel is still with us," he added.

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