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Is This The End For The Budget Airlines?

News that Ryanair has been hit by the rising cost of fuel has seen many aviation experts question the long term security of the sector and whether we will see any major companies going under over the next few weeks and months. The sector itself has been built upon a no frills service which requires large volumes of customers to make it work, but in times of economic slowdown the model has been found wanting.

While it may be a little early to call the end of the budget airline sector we may well see cyclical peaks and troughs far exceeding those of the traditional airline sector. In the bad times those who live on the edge, offering the best prices to attract the largest volumes will suffer, where as those who maybe find some middle ground between price and quality may survive longer term.

It is also easy to forget that as the budget airlines grow we are seeing large orders for new planes, often costing hundreds of millions of pounds over a number of years. These costs need to be covered in the good times and the bad, something which is often overlooked.

Those who use budget airlines should brace themselves for more bad news in the not too distant future.

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