If the service is cancelled, then the aircraft programmed for it will either be used on a much more profitable service (perhaps replacing a u/s aircraft), or will not fly at all.
The costs avoided by not operating the service are far more than the sector fuel cost; all the direct operating costs are avoided, and some of the indirect costs may be avoided or reduced.
You would have to be paying off more than a few disgruntled passengers at 250 Euros a head to make that the worse option.
Considerations of reputation and crew/aircraft positioning may also be a factor in an airline's decision to cancel or not.
The CAA's SRG would say (as a conditioned reflex but in this case rightly) "none of our business, old chap, have another cup of tea".
The ERG - sorry, Regulatory Policy Group -would only intervene in the event of frequent cancellations over a protracted period, if at all. Indeed, I rather suspect that this behaviour is not in their remit in the first place, in this derugulated age. Market forces rule! Passengers can always vote with their feet.
(If the cancellations were associated with lack of sufficient working capital, that would be another matter, as it has a bearing on safety.)
But even if they were to intervene, it would only be a light tap on the knuckles. "If an airline chooses to operate this way," they would argue, "who are we to interfere?" Like all civil servants*, masterly inaction is their default plan.
* I know, I know, but if it quacks like a duck, walks like a duck, thinks like a duck, behaves like a duck........
Last edited by Capot; 16th Oct 2012 at 15:05.