eu01 - in an average November in Rome, it pours with rain and is not particularly warm either. If you want to go to Rome as a tourist, there are far better times of year to go.
In 2005, oil was $50 per barrel. It's currently about $100 per barrel and has been close to $100 for the last 12 months. You can hedge all you like, but all airlines are passing the cost of oil onto customers.
We appear to have an airline that is leisure focussed and has realised that sometimes when consumer demand is really low, the cost of running the business is higher than the revenue that can be achieved and thus it's best not to incur the cost of offering the product in the first place.
An analogy might be a retail store chain like John Lewis realising that if they are open on Tuesday at 2 am, they will not get many customers and better to just let the cleaners get on with their work without all the extra costs of running the extra costs of customer centric staff, store managers, security, customer centric lighting, etc...
DJ
Think you pretty much got it nailed on.
Europe is in recession and disposable cash for flights is not around.
Better to hold off if you are going to make losses on a route as pretty much nobody else is going to go on the route either.
The companies that survive the recession are those who continue to adapt all the time, the recession is going to be around for another 3-4 years so why kill yourself immediately.
The poster with idea of going after small businesses is fine but problem is that small businesses are cutting back like never before. Its not great travelling from UK to Italy and getting a services contract or order but then finding customer takes 6 months to pay if they ever do.