High oil prices could drive many low cost airlines out of business according to easyJet. Oil prices have recently reached over $100 a barrel and Francois Bacchetta, managing director of EasyJet France said: "There are currently about 50 low-cost carriers on the European market -- that's absurd, in a few years' time there will be no more than about three or four of us left in Europe."
"If we ourselves passed on these increases completely we would have to raise ticket prices by 10 percent in one go and our payload factor (the proportion of seats sold) would fall from 85 percent to 60 percent. Our whole low-cost business model would be thrown into question.”
Bacchetta added that he suspected airlines that were the most competitive, such as easyJet and cheap flights rivals Ryanair were more likely to succeed along with a couple of others from Europe but that it would take mergers to save others form failing. EasyJet last month issued a profit warning due to rising fuel costs.
