Tough time ahead for budget carriers

Failed Slovakian low-cost carrier SkyEurope could be just the first casualty among the smaller airlines finding it difficult to survive one of the worst slumps on record, analysts said.
"End of summer, early autumn, is a likely time for airlines to shut down. There are going to be more," said Nick Cunningham of Evolution Securities.
"This winter is going to be very hard with very weak traffic and even weaker yields," Cunningham said.
"If you think an airline is not going to be viable, then you shut it down. There is no point" in continuing to run it, he added.
Bratislava-based SkyEurope said last week that a court-appointed trustee had decided that a bankruptcy application was the only way forward owing to "the lack of sufficient interim funding to finance ongoing operations.”
The airline had been in trouble for some months, not having the scale of the major low-cost carriers such as Ryanair or easyJet to survive the deepest global downturn since the 1930s.
"SkyEurope will not be an isolated case. There will be other low-cost carriers who are going to find it hard to get through the winter," said Yan Derocles of Oddo Securities.
Formed in 2002 as the market recovered from the shock of the 9/11 attacks in the United States, SkyEurope like many of its small rivals had only limited funding but hoped to cash in on the boom in air traffic in the following years.