My own view is the low cost operations are a double edged sword. On one side the public gain cheap seats, good news indeed! And more importantly for some it gererates cash flow. On the other side it forces operators to cut costs to compete this could have the effect of some operators cutting costs where they should not!
The costs are being driven up by insurance companies etc, at a time when airlines are desperate to keep them down. As these costs rise operators will be forced to cut costs dare I say corners elsewhere? A recent statement from Britannia regarding their intention to remove seat only tickets from their bond to bring them in-line with other low cost operators is one area where costs are going to be cut by traditional operators in a bid to jump on the band wagon.
Ultimately you can only play this game for so long and then operators will give way under the strain of reduced margins. All in all low cost operators are good for the public in the short term but are doing a lot of damage to the long term stability of the industry. One only need look at the Ryanair situation in France or Bournemouth, the travelling public are now paying the price for cheap tickets by loosing services in these areas.
PS Share price up 3.5p Just goes to show the price is not always a indicator.