Surely there is a place in the market for both "low cost" and "full service" airlines. It may mean that some companies will have to reduce services on some routes but the likelyhood of a successful airline collapsing completely is unlikely.
Whatever your personal thoughts on "low cost" vs "full service" you
cannot argue with economics. As an example:
London to Frankfurt: Leaving 28 September and returning on 01 October on evening flights.
British Airways £182.90
Buzz £80.00
Ok, you do get something to eat on BA, but £102.90 is a awful lot to pay for it.