24.04.08
Oil prices above $100 a barrel will drive most of Europe's budget airlines out of business, the head of easyJet's French subsidiary said. The warning of a massive cull came as the budget airline's shares fell more than 4% after another spike higher in oil prices towards $120 a barrel.
Francois Bacchetta, managing director of easyJet France, told a news conference yesterday: ‘There are currently around 50 budget airlines in Europe, and that's absurd. In a few years' time there will be no more than about 3 or 4.'
‘If we passed on these [fuel cost] increases on completely we would have to raise ticket prices by 10% in one go and our load factor would fall from 85% to 60%. Our whole low-cost business model would be thrown into question.'
‘The most competitive companies like Ryanair or ourselves will survive, along with one in Germany and perhaps one more. The others will die or merge. This phenomenon will even touch so-called normal [full service] airlines.’
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