Oh how I love to tease!
Looks like Air Berlin withdrawal from the UK domestic market is yet another sign of over capacity/poor yields?
The summer rain has at least brought a glimmer of hope to the UK Lo-Co's who have taken a summer booking/yield battering this summer!
The plastic must be repaid and with the UK interest rates projected to climb, repaying the UK debt means that the Lo-Co's are looking outside the UK for profitable growth.
What you also have to take into consideration, the profit making ploy used by the established Lo-Co's of buying a new plane at discount, selling it at a profit on its delivery, then paying higher leasing charges for the airframe.
Every time you take delivery of a new aircraft you make a profit, but then you have to pay back higher leasing costs. As the cost of borrowing money rises, so do the leasing costs!
You end up only surviving by buying new planes!
Between 50 and 60% of Lo-Co profit is from non flying revenue.
If there has not been some serious consolidation or major airline failures within a year, I will be amazed.
The Lo-Co's have lots of new planes to fill and hefty penalties for delaying or cancelling orders which financially cannot be absorbed.