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I’d be interested to know what percentage of Low Cost passengers are business users these days. I think that this may represent the major opportunity to sustain current yields and possibly grow. Up to now the Low Costs have been ideal for people taking long weekend breaks, but it doesn’t matter if the flights are cheap if accommodation, trains, taxi’s meals etc push up the cost of a weekend break to such an extent that people think twice about going in the first place, especially if consumers are forced to rein in their spending over the coming months/years.
You won’t find many companies that aren’t looking to reduce their costs these days and one major area is in travel. In a climate where jobs aren’t so easy to come by people won’t just leave because the company changes its travel policy, they will have to put up with it. The one downside is airport location. A friend of mine travels to Brussels fairly frequently. His company policy changed to say that low cost carriers had to be used. The subsequent flight from, I think, Stansted to Charleroi was cheap but the associated time and expense of travelling from London to Stansted and Charleroi into central Brussels negated any savings made, and took longer.
In summary I think the model may have to evolve a bit to survive and it will be the airlines that can be bit flexible that will keep on growing.
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