Not Just Ryanair at Stansted.
From Citywire.
Is this the beginning of the end for low-cost flying?
By Tony Bonsignore | 12:04:05 | 24 July 2008
More worrying news for the budget airlines this morning, with Easyjet announcing it had been forced to severely curtail its growth plans over the coming months.
The Luton-based cheap flight pioneer said it would slash its capacity at Stansted by 12% during the winter months, as well as close its base in Dortmund. Easyjet said its hand had been forced by the high price of oil and the worsening economic climate.
Annual fuel costs have increased by £185m, Easyjet reported.
The announcement comes just weeks after rival Ryanair said it would cut around 250 winter flights from Stansted in a bid to cut spiralling fuel costs.
The key question for investors – and travellers for that matter – is whether this a temporary blip, or the start of something more fundamental.
On the one hand our thirst for low cost travel seems unlikely to subside any time soon. The EU is expanding and its citizens becoming ever more mobile. And with money getting tighter many of us will be turning to the Easyjets of this world as we look to put together cheaper DIY holidays.
Neither should we forget the hundreds of thousands who have bought second homes on the basis that No Frills Air flies daily to an airport just 90 miles away for less than a fiver all in.
And yet…one can’t help but feel that there is something inherently unsustainable and perhaps indecent about flying to the south of France for the day for the cost of an M&S prawn sandwich.
Especially with the dollar cost of a barrel of oil still well into three figures.
And especially given growing concerns over climate change.
Today then, the Money Blog asks for your thoughts on the future prospects for the cheapy airlines. Are we witnessing the beginning of the end of budget air travel? The end of the beginning, even? How would you feel about the return to the days when a plane ticket to the continent cost hundreds - rather than tens - of pounds?
Or is this simply a minor setback in the inexorable growth story of the budget airlines, a trend which has rightly put regular air travel within the reach of the masses?