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Most of Europe's low cost airlines to go out of business?


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According to Francois Bacchetta, managing director of Easyjet France, most of Europe's low cost airlines will go out of business if oil stays above $100 a barrel. (Current oil price near $120)

Meanwhile Easyjet's share price has nosedived to 274p, as compared to the years high of 731p. Similar woes with Ryanair's share price, following profit warnings.

Are we looking at the end an era, with  the low air fares we have enjoyed set to become a distant memory? 

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Anton

Well if "my" management are to be believed oil at well over $100 it is very much going to have an impact on aviation, tax or not. Some airlines have already lost the protection of hedging so this is going  hurt.   

 

   

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Posting was specifically about Budget airlines who are in a constant round of negotiation to minimise landing fees and maximise subsidies from regional and local authorities. From Easyjet’s perspective the earlier any competitors go out of business and the harder / more expensive their competitors find it to obtain funding the better. The choices for users of most budget airlines to France are do not travel or travel by car and tunnel or ferry. I think you will find the costs of car and ferry prices will rise more than the costs airlines. In real terms fuel, air fare and ferry prices are much lower than the 60s when I believe more people holidayed by car in France or to Spain than is now the case.

 

In passing I think airline management are in general to be totally disbelieved, not sure why I bothered with airline. An example all Airlines say safety is paramount.  Why then do almost all civilian airliners have forward facing seats and almost all dedicated military transport planes have rear-facing seats?  Why has nobody done anything to discourage passengers from buying highly volatile liquids in glass bottles and putting them in overhead lockers? They could just as easily be bought or delivered airside on arrival

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Since I'm no expert on matters maritime I'll perhaps bow to your opinion that that ferry prices will rise more than the cost of airlines. Nevertheless the LoCos have generally driven most of their operating costs ( e.g. landing fees, crew costs)  down to such a level that  fuel costs make up an increasingly dominant fraction of operating costs - no matter how clever they are at negotiating fees and subsidies.   In my humble opinion this winter folks are going to be faced with the fewer flights or no flights on many routes.

Going off at a tangent ( if I haven't already) the argument against forward facing seats has always been that passengers don't like facing aft ( having flown down the back of an RAF VC-10 years ago I must admit it did seem strange) and also that there is a reduction in protection from loose objects in the event of an accident...since we now have rear facing seats on many passenger aircraft I guess those arguments no longer apply. As for volatile liquids - agreed,. As for .."management are in general...  totally disbelieved"...completely agree. 

 

 

 

  

 

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Since when did airlines, especially the low costs, care about what passengers like? The fact is that rear-facing seats are incomparably safer as studies have shown again and again, in collision accidents. (It makes no difference if the plane blows up mid-air though.)
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