Hudson,
You are over simplifying the issues here. Easyjet's shares have fallen that doesn't mean that they are set to go out of business.
The biggest factor is that Ryanair and Easyjet have fallen foul to their over successes. Large profits attracted competitors into the industry and established rivals looked at ways to alter their business models to compete. Easyjet and Ryanair are large enough to gain economies of scale at their own bases, but so are BA, BMI etc.
Just look at how many low cost airlines have been attracted into the market - BMIBaby, ThomsonFly, Jet2 etc
We have seen Duo go bust, simply because they couldn't compete with their larger rivals.
The main beneficiary over such practices has been the consumer, ridiculously cheap seats which appear to be unsustainable.
The airline industry is at a stage now where it will eventually begin to reallign itself with prices that are sustainable.
It is never financially sound in the long run for companies to compete on price, the largest with the most resources can take the hit until it has driven other competitors out of the market.
Sagey