Knee-jerk reactions in many cases. When you invest in airlines (I wouldn't personally) you've done your research into how the airline industry works, and you know what is likely to yield a reasonable return over the LONG TERM.
As many have already commented, many low-cost airlines won't make it through the next year or two. However, if I had to put my money somewhere, I'd be willing to bet on easyJet and Ryanair being around in 5 years' time. They've built up the size, brand recognition and have sussed-out the main markets. Looking at the broad (and long-term) picture, I reckon they both have a future.
I can't say the same for the other low-cost carriers, many of whom don't publish results and are likely to be losing large amounts of money.
In short, many investors don't know an awful lot about the industry, or the airline companies they invest in. Those that avoid investing in airlines altogether are probably more on the ball in any case.
