Low-cost carriers facing trouble?
UK: Newspaper report says bubble could be about to burst
“Has the buzz gone out of low-cost airlines?” asks The Guardian’s transport correspondent Andrew Clark in today’s newspaper? While the advent of no-frills carriers has no doubt opened up the world of travel – the newspaper points out that you can hear Scouse as often as French on the promenade in Nice these days – Clark argues that “cracks are beginning to show in the budget airline world”. As reported by News From Abroad last week, Ryanair has agreed to buy Buzz from its parent company KLM after the Dutch flag-carrier decided three years of losses were enough. There have been further low-cost failures – Ciao Fly and Goodjet both failed last year – and many commentators are predicting that the meteoric rise of no-frills airlines will have to slow or even stop soon. Dominic Edridge, a transport analyst at Commerzbank, sums the situation up by telling the newspaper: “I hate to use the phrase but it is almost like a bubble out there. People think there is a pot of gold to be had. Over the last couple of years demand for traffic has been keeping up with supply, but it cannot go on indefinitely.”
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