Air fares tumbled last year as a vicious price battle raged in the skies between the new no-frills budget airlines. But there is growing evidence that the rock-bottom bargains of 2000 may never be repeated, with fares this year on a firm upward trend and in some cases rising steeply.

In a report published last week American Express, which runs an index of air travel prices, said the no-frills carriers are under increasing pressure and are likely to become "less attractive" in 2001.

Amex director Matthew Davis said: "High operating costs, such as fuel prices and airport fees, are starting to affect the financial performance of the low-cost airlines. The fare gap between traditional and low-cost airlines is narrowing and this is likely to continue into 2001."

Amex's findings are borne out by a snapshot survey of fares offered by Ryanair, Go, Buzz and EasyJet. The results (see below) reveal that although bargains can be found, "budget" short-haul fares frequently cost more than £150. We also compared fares with British Airways' standard charges and found that while the flag carrier was usually more expensive, there are flights where it beats the so-called cheap airlines on price.

Mr Davis predicts that the budget airlines will increasingly switch from marketing ultra-low prices to advertising destinations, convenience and frequency. For example, last year Go, the fast-growing but until recently heavily loss-making airline currently up for sale from BA, was promoting fares to Barcelona for £40 return, inclusive of tax. Such was the popularity of the offer, plus similar offers from EasyJet to Barcelona, that the Catalonian capital recently overtook Paris as the most popular overseas weekend destination for Britons.

But Go's current television advertising focuses on routes rather than prices, and in our survey we found that its fares to Barcelona were £108-£198. Go sales and marketing director David Magliano says: "It's true that we haven't repeated the absolute rock bottom promotional fares of January last year, but we have had a larger number of smaller promotional offers."

He insists that the savings Go makes by using internet bookings rather than agents cancel out the sharp rise in fuel costs. He also claims that Go will never charge more than 50% of the full economy fare on a traditional airline.

Both EasyJet and Ryanair are facing severe cost pressures at their home airports. When EasyJet opened services from Luton Airport, it negotiated a five-year deal where the airport earned just £1.60 per passenger plus a 62p handling charge. Luton wants £7.89 per passenger, and two weeks ago reached an interim deal where EasyJet will pay a fee believed to be £5 to £6 per passenger.

EasyJet insists that this will not lead to higher prices, but it is axing its Luton-Liverpool route, which started at £20 return. "It's just not commercially viable to offer services at that price," says an EasyJet spokeswoman. She says expansion plans at Luton are now on hold while it develops alternative hubs at Geneva, Amsterdam and Liverpool.

Ryanair is facing similar cost pressures. Like EasyJet, it is engaged in a highly public battle with Aer Rianta, the operators of Dublin Airport, which it says is Europe's most expensive airport.

Ryanair's low fares have also been supported by ultra-cheap fees at the small airports that it flies to. But they are likely to end, claims one senior airline industry figure, who did not wish to be named. "Some airports were almost paying the likes of Ryanair to fly to them. But the honeymoon period may soon be over as airports say it's time to pay up. There will come a time when the special deals wear off."

But Ryanair spokesman Alan Tyrrell says: "Airports are screaming for Ryanair to come to them, particularly if the only other operator is a high-price carrier. If Ryanair drives 0.5m people through an airport, that's at least another 0.5m cappuccinos it sells." He insists the low-cost model that Ryanair pioneered remains in place, despite the airline's ambition to eventually overtake Lufthansa as Europe's biggest carrier.

Airlines are notoriously secretive about releasing financial details - none of the low-cost airlines would reveal the real average fares they achieve - but they will highlight the ways they undercut traditional airlines.

Ryanair operates with just three cabin crew compared to six on similar sized planes, and says turnaround times for its planes at airports are 25-35 minutes, compared to one hour for rivals. Not offering hot food dramatically cuts the loading and unloading time, while cabin crew must clean the plane as they go.

Click here to see a price comparison table of fares to Venice, Barcelona, Geneva, Milan and Glasgow.