Budget airlines, domestic and European carriers could be badly
damaged by the aftermath of the terrorist attacks, in addition to their
larger transatlantic counterparts.
Increases in insurance costs, the price of fuel, and heightened security
passed on in landing charges and other fees would all take their toll,
warned analysts this week.
For budget carriers such as easyJet, Go and Buzz, the impact of tighter
security measures could also prove costly. "Their business models work
on high turnaround, so any impact on check-in times may have an
effect,"said Roger Tejwani, a transport analyst at WestLB Panmure.
The airline industry is bracing itself for bankruptcies and a wave of
consolidation. Virgin Atlantic announced cuts of 1200 and British
Airways, which was already looking to shed 2800 staff, froze recruitment
and discretionary spending.
The International Association of Travel Agents has predicted the
industry will lose £6.8bn in the next few weeks. Few airlines yet
have plans to resume advertising. The British travel industry is also
scaling back plans to promote itself in the US.
This article was first published on Marketing