Dysag,
maybe I should be more specific. Of course I don't mean that this means "Low Cost Airlines" will cease to exist. I mean that Tickets will no longer be cheaply available.
1) it's normal in a capitalist economy that not all players survive.
Of course.
2) due to higher load factors, the loco's have lower fuel cost/pax.
True, but the profit-margin will decrease, because the ratio between ticket-prices and operating costs will be less.
3) history shows that vfr / vacation travel is very recession resistant.
I disagree to that; if people have less money to spend while at the same time ticket prices go up, then the demand goes down. People think twice before going on a weekend-trip when it gets expensive. They will still travel, but not as often as before.
4) folks have very short memories, or are just too young to know that....
...that what? I don't understand this point.
5) when the worst is over, the fittest will have survived, loco's included.
See point 1). I fully agree to that.
6) on short-haul, the real low COSTs will always beat the dinosaur carriers.
Not so sure about that. Some of the LOCOS will go, as well as some of the "dinosaurs" as you call them. Right now, the trend is that the dinosaurs reduce their service (or charge extra for it), or operate their own low-cost daughters. The difference between low-cost carriers and the major carriers is getting less and less.
What I mean to say is, that flying will become more and more expensive. You won't be able to fly across Europe for 0.99 Euros anymore. There will still be cheaper tickets available than the dinosaurs' offer, but they won't deserve to be called "Low-Cost" anymore.