The night-walkers of Uganda

Which is the odd one out? Why?
BA / Air France – KLM / Credit Suisse / Qantas
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Is this the end of budget travel? 
Bankruptcies increase as major airlines consider 
charges for baggage and food 
Dan Milmo, Houston 
June 6, 2008 
The list of bankrupt airlines is growing every 
week, but the biggest change in the airline 
industry could be the end of cheap fares. In 
the last ten years, low ticket prices have meant 
that people can fly easily to other countries for 
cheap holidays and weekend breaks. But airline 
executives warn that fares have to rise. 
On Tuesday, Ryanair warned that it would have 
to raise air fares by about 5% this year because 
of the high cost of oil. The budget airline said that 
it will only break even this year if oil remains at 
around $130 a barrel. European budget airlines, 
such as Ryanair and easyJet, rely on low fares 
to fill their aircraft. They then get more money 
out of passengers by charging for extras such as 
luggage check-in and hotel bookings.
British Airways, Air France – KLM and Qantas 
hope to find their way out of the problems 
caused by high oil prices by raising fares. But 
a leading industry executive warned that, if this 
isn’t successful, they might also start to charge 
passengers for baggage check-in and food. 
The boss of one of the world’s biggest airline 
alliances, oneworld, whose members include 
BA and Qantas, said the group would consider 
changing their rules to allow national airlines to 
charge for extras similar to the way that budget 
airlines do.
John McCulloch, oneworld’s managing partner, 
said that if other airlines decide to charge for 
drinks in economy class, oneworld alliance will 
have to do the same. Speaking about baggage 
check-in charges, he said: “Airlines would say 
that it’s the right thing to do. Some already 
charge £20 for a bag and £10 for a meal. We are 
going to see much more of that.”
Extra fees for bags and food and drinks 
are usual in the budget airline industry, but
long-established airlines have, up to now, not 
charged for these services.
Agreeing with BA boss, Willie Walsh, McCulloch 
said fares would also have to rise if airlines 
were going to stay in business. With oil prices at 
around $130 a barrel, most airlines cannot make 
a profit. 
According to analysts at the investment bank 
Credit Suisse, budget airlines will have to do 
something. Not even easyJet and Ryanair will be 
able to make a profit if they don’t buy up fuel in 
advance, said Credit Suisse.
Ryanair’s chief executive, Michael O’Leary, said 
on Tuesday that his airline, which cut fares by 
around 1% last year, would survive this difficult 
time. “People are thinking more about money, 
so they fly with us instead of with the more 
expensive business-only airlines which are going 
bankrupt,” said O’Leary, referring to Silverjet’s 
financial problems. Silverjet is (or was) a
UK-based business-only transatlantic airline. 
“In the long term no industry can exist if it doesn’t 
cover its costs,” said Toby Nicol, easyJet’s 
director of communications. Airlines spend about 
a third of their budgets on fuel, and the recent 
price increase is causing enormous problems for 
an industry that is still recovering from the
9/11 attacks.