How come that low-costs can offer low fares and still make a profit, whereas the legacies are unable to offer cheap Economy tickets?
It's a hangover from the years when the legacy carriers could charge what they wanted and p!ss money away like it grew on trees.
Look at what it took in the States to get legacy airlines like United back to a position where they now have a chance of survival. Bancruptcy protection and the ability of management to go to a Judge and have all the binding agreements torn up. United started again and maybe they will get it right this time. The employees and creditors grumbled and moaned but knew they had to accept the good times were over and in return they got a fighting chance to keep their jobs.
Airlines like BA don't have this luxury of chapter 11 reorganisation. Don't you think Wille Walsh would rip up all the agreements if he could? He is stuck with a militant workforce from top to bottom and little power to do a Ryanair. O'Leary on the other hand got to learn from looking at the BA's in this world, and set up a company where he has negotiated very favourable terms with employees and suppliers. That's not to say his employees and suppliers are not doing well out of the system, just that they have to work harder under his regime, and if things go bad for the company the company has the ability to trim costs in a way that BA doesn't.
There is an excellent pyramid in some analyst report into the airline business in Europe. It shows BA, Easy and Ryanair. It predicts that all three will prosper in the end. BA will shrink considerably and specialise in the small amount of premium traffic. Ryanair will be huge and cater for very low cost travellers who don't really care about anything except getting to the destination, and Easyjet will fill the gap in between. Makes sense to me.