Is the 'low-cost' model viable in the long-term?
According to MOL, there will only be one, maybe two, low-cost operators still in business in the long-term. This was a statement made a few years ago.
He was, of course, referring to Ryanair and easyJet.
It seems now that in order to maintain the 'low-cost' model and at the same time provide 'low-fares' the financial limits are being lowered to a point where even fundamentals, such as decent terms and conditions for pilots, are being compromised to a level that is becoming unacceptable.
Is this out of necessity or just an attempt to try and get away with low pay and conditions?
Or is it something more sinister in that the current low-cost/low-fares market is not proving viable?
Although several low-cost airlines appear to be struggling at the moment - including the loss of GSM - what is the long-term future for the current protagonists?
Jet2 appear successful, but their cost base differs from the 'big 2' in that they operate ageing B737s. What will the future hold when the fleet requires updating and they have to compete on an equal footing to the larger carriers? Will PM have retired by then and will it matter anymore?
There seems to be a 'cracking at the seams' and I wonder if this is purely a symptom of the present rescession or something more deep-rooted?
KR
FOK