Health of budget airlines

Old Oct 27th, 2008, 02:41 PM
  #1  
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Health of budget airlines

We're looking at travel plans for 2009, either spring or early fall. As I was investigating cheap flights, I ran across one site with a large link on the home page, Letter to Creditors. Oops, bad sign.

So now I'm wondering, with the current economic worries, if some budget airlines will be going out of business. And if other more financially robust airlines will be canceling their less popular routes.

I usually plan well ahead of time in order to take advantage of FF miles. And we're getting farther off the beaten path these days, having already been to London, Paris, Rome, etc.

So now I'm wondering if we really will be able to make a flight from Dubrovnik to Rome and then connect to a flight to Palermo. Or other, somewhat iffy connections.
Mimar is offline  
Old Oct 27th, 2008, 02:53 PM
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If you do, be sure to use a credit card to pay for the ticket. If the airlines go under, then you have recourse. Debit card payment, it becomes questionable. Also, some cheap airlines are doing well -Ryanair, Easyjet, BMI, etc.
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Old Oct 27th, 2008, 09:48 PM
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Absolutely have to worry. For example, SkyEurope has been around for years, and is basically the first budget airline in Central Europe, and still one of the larger ones. It's ailing and is looking for investors to inject money to it.
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Old Oct 27th, 2008, 11:25 PM
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Personally, I would be a bit worried about any European airline, save for the Big 3 (AF/KLM, BA, Lufthansa). Even someone like SAS, while certainly valuable enough to be purchased by someone, is going through some financial difficulties and looking for a buyer. Doubtful they will go out of business, but what do you do if you paid extra for that non-stop and all of a sudden find yourself making an unwanted connection?

So, I would do the following:

1) Don't buy tickets too far in advance, unless you get an amazing deal (such as the pay only taxes and fees).

2) Stick with one of the bigger budget carriers. Air Berlin, EasyJet, and Ryanair are perhaps your best bets. I would also include Transavia, as it is owned by AF/KLM, as well as VLM (not really a budget carrier, though).

3) Don't prepay for hotels that depend upon the iffy connections. You will be able to get to Dubrovnik. But if your itinerary is dependent upon getting there at a specific time, then keep some flexibility in your plans and don't tie up money in a hotel.
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Old Oct 28th, 2008, 03:27 AM
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Mimar, which airline are you thinking of?

One positive development is decline in oil prices. As I recall, budget airlines don't usually hedge their jet fuel exposure, lower fuel bill should mean less cost pressure.

I would be more concerned about financial stability of some charter airlines--esp those tied to tour companies (100% leisure travellers, all discretionary spends, limited destination diversification, highly reliant on UK/German passengers).

jkbritt, I would not include BMI among budget airlines.

travelgourmet, in case you are not aware, SAS is 50% jointly owned by Swedish/Norweigian/Danish governments. There has been a talk that SAS may be seeking a buyer (possibly LH), though LH would be busy looking at others, like Austrian Airlines, Brussels Airlines, a minority stake in Alitalia.

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Old Oct 28th, 2008, 07:58 AM
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It's Croatia Airline that flies Dubrovnik to Palermo via Rome.

But even if I restrict myself to the big airlines, they might be canceling their less popular flights.

And it's hard to wait when you want to use FF miles. We looked at using FF miles to fly to Hawaii; there was only one (one-way) flight available in all of February. I'm thinking people are using their FF miles now as a way of saving money. Plus of course the miles are getting less valuable.
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Old Oct 29th, 2008, 01:31 AM
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Speak of the devil:

http://sterling.dk/

While not the size of Ryanair or Easyjet, this wasn't a particular small operation either and was one of the largest budget airlines in Scandinavia.
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Old Oct 30th, 2008, 07:17 AM
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bmi is now in the process of being acquired by Lufthansa.
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