Filling your aeroplane up with 16 year olds who are flying for 2p (+tax) for a quick there and back won't make your accountants or shareholders happy.
Not sure what FR's break even yield are, but their 1p fares are just cheap marketing. It's a false economy.
FR's primary success has been based re-selling Boeing aeroplanes. We now know that avenue has been closed to them, Boeing got wise and Airbus aren't ready to be mugged just yet. Their second success was based on traffic growth and hub expansion. The current climate has stalled their business model.
Worse still, the lo-co market is showing signs of saturation (look at Gatwick). There aren't many places left FR can open new bases and there aren't many places where they don't fly to already. He could keep costs low by 're-deploying' bases but that costs money too and takes time. One of MOL's options is to go acquisitive with an existing lo-co airline and I agree with his synopsys that Aer Lingus is currently a basket case.
Don't believe me? Look at the share performance for all publicly quoted carriers, in the last 6 months FR has been static whereas all the rest (lo-co and legacy) have risen significantly. So his investors know that the game is definitely changing.
DM.
PS: I thought the Panorama programme was very weak, there is so much more they could have highlighted.