Low cost operators will generally do very well in any downturn as passengers move away from more expensive carriers. In an upturn, those passengers will generally move back to the higher cost carriers; but they will be replaced by 'new travellers' - people who previously didn't have the economic ability to travel.
Of course, in a downturn, costs have to be tightly controlled. Demands for pay increases most certainly do not bode well for the viability of any company!