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53330 Views 204 Replies 49 Participants Last post by  hkskyline
FACTBOX-EU plane ticket tax - who favours it, who opposes it

LUXEMBOURG, May 14 (Reuters) - The European Commission was asked by European Union finance ministers on Saturday to draw up plans for on levy on airline tickets that each country would be free to implement to help pay for more development aid.

Following are some basic facts about the air tax, why it was suggested and the extent of support so far.


* French President Jacques Chirac aired the idea, telling the World Economic Forum in Switzerland in January that a tax of $1 per airline ticket could raise $10 billion a year to fund bigger campaigns against AIDs and other diseases in Africa

* German Chancellor Gerhard Schroeder backs Chirac, who has not explained how he calculated the $10 billion.

* Luxembourg Prime Minister Jean-Claude Juncker announced at the May 14 Luxembourg meeting of EU finance ministers that 5 or 6 countries were ready to go ahead with a voluntary system.

* Spain is said by France to be in favour alongside France and Germany. Belgium says it supports the plan.

* Dutch Finance Minister Gerrit Zalm says his country would be willing to sign up to a tax that helps Dutch state finances, making it clear his country would like money for other reasons since it is one of the few to already meet Africa aid targets.

* Those who voiced opposition at the same meeting included Austria, Greece, Ireland, Hungary and, according to EU officials, several other eastern European countries that have just joined the EU who are worried more about getting their own public finances in shape to join the euro. Italy cautious too.

* Sweden and Finland have made it clear they do not like the idea. Swedish Prime Minister Goran Persson met Finnish counterpart Matti Vanhanen in April, with Persson saying he did not think the idea or an airline tax was practical.


* French Finance Minister Thierry Breton says no exact amount for the levy has been fixed but something in the region of 1 to 3 euros is what could be expected.

* Juncker says the Commission to report back for a decision by finance ministers at their next meeting on June 7.

* Countries are looking for ways to fund aid for Africa and meet the Millennium Development Goals, which were agreed at U.N. level in 2000 and include halving poverty and disease by 2015.

* Britain chairs G7/G8 club of industrial powers and insists on deal on aid/debt relief for Africa at a July 6 summit that will take place in Gleneagles, Scotland, but nobody agrees on where to find the money.

* Among G7/G8 countries, reactions to Britain's plans for debt relief and raising an extra $50 billion a year for aid are still blurred but roughly as follows:

U.S. (No), Japan (No, has other ideas), Canada (said not to be in favour), Germany (yes, to a point), France (yes, to a point), Italy (not clear but perhaps less keen than France, Germany), Britain (yes)
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EU ministers agree tax on flying

i just find the idea absurd:(

"The tax is expected to be compulsory in Belgium, France and Germany, while Malta and Cyprus and Ireland would give passengers a choice as to whether they pay it."

So i can buy my ticket in Ireland and still get away from the tax?
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EU to Propose Emergency Coordinated Air Safety Plan

EU to propose emergency coordinated air safety plan
26 May 2005

BRUSSELS, Belgium (AP) - The European Union will propose an "emergency coordination procedure" for airline safety so that in the future European governments don't take unilateral action against airlines, the EU head office said Thursday.

The move comes after the Netherlands imposed a one-month ban on Turkish charter airline Onur Air two weeks ago because of safety concerns, sparking subsequent bans at Swiss, French and German airports.

The countries agreed in principle to lift their bans on Tuesday after Onur Air said it would submit to additional safety inspections.

"We are going to set up an early warning system," Stefaan de Rynck, spokesman for EU Transport Commissioner Jacques Barrot, said after a meeting of aviation experts from the EU's 25 member states.

In the future, "action should be taken in a coordinated way," de Rynck added.

The European Commission also wants EU governments to give it the power to impose EU-wide flight suspensions and bans. EU governments have rejected such a move in the past.

The original decision by the Netherlands to ban Onur Air left thousands of Dutch holiday makers and others stranded in Turkey looking for alternative arrangements.

Onur Air is primarily a budget domestic airline in Turkey, but it is also chartered to carry some of the millions of Europeans who vacation in Turkey during the summer.

To avoid future disruptions, all EU countries should step up inspections of Onur Air flights, the Commission said.

The plan for an emergency coordination procedure comes as EU governments are moving toward stricter controls for foreign airlines that operate in its member countries.

Last February the Commission unveiled plans to create a blacklist to publish the names of airlines that are banned by any EU member country.

The blacklist plan follows the crash of an Egyptian Flash Airlines jet into the Red Sea in 2004 that killed 148, mostly French tourists. The airline had already been banned by Switzerland -- which is not an EU member but works closely with the bloc -- when the crash occurred.
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EU Considers Including Aviation In Emissions Trading

EU Considers Including Aviation In Emissions Trading
31 May 2005

BRUSSELS (Dow Jones)--The European Commission is considering including aviation in its emissions trading program, Environment Commissioner Stavros Dimas said Tuesday.

Speaking at the opening of a week-long conference on climate change and the environment, Dimas warned that action must be taken because emissions from aviation rose by nearly 70% from 1990 to 2002, and continues to increase with the rise of low cost airlines.

In response, the Commission is considering a fuel tax, extra ticket charges - or inclusion in the European Union's emissions trading scheme.

"It is the most probable to be approved," Dimas said. A decision would be taken at the end of June or beginning of July.

Action won't come overnight. Airlines will join the system only after 2012, when the Kyoto Protocol on climate change expires.

"It will be difficult to do it before, but we shall try," Dimas said.

Airlines favor the emissions trading plan over the other possible taxes, saying it will hurt their business least.

"Charges and taxes are aimed at reducing the number of people flying, which has a serious affect on our business," said David Henderson, the spokesman of the Association for European Airlines. "We contribute only a small amount to overall greenhouse gasses."

Separately, Dimas said the emissions trading plan is going smoothly, with prices hovering around record highs. EUR19.45 a metric ton.

Relations with the U.S. remain fragile. Dimas said he "agreed to disagree" with the U.S. on the Kyoto Protocol. In recent environment talks, he said Kyoto wasn't even mentioned.

But he has not given up trying to convince the U.S. to sign the agreement. As long as the U.S. stays out, he said it would be difficult to include fast-growing development economies such as India.

The European Union will take a low profile on nuclear energy. Dimas said he understood why politicians are reluctant to discuss it because of the public outcry about waste disposal and the cost of building new plants. But he added that some countries are in the process of increasing their number of nuclear power plants, adding that nuclear is a positive in dealing with greenhouse gases.

Finally, Dimas urged European carmakers to respect their voluntary commitment to limit the CO2 emissions of their vehicles to 100-140 grams a kilometer. Carmakers promised to reach this goal by 2008, but now look unlikely to do so. Dimas said he met with the industry representatives a few days ago and urged them to stick to their promises, though he lacks any powers to force them.
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Growth of aviation sector 'poses threat to climate change targets'
9 June 2005
Financial Times

Low-cost airlines and their cut-price holidays pose a serious threat to the government's climate change targets, MPs were told yesterday.

A report commissioned by Friends of the Earth, the campaign group, argued that the growth in the aviation sector could wipe out the reductions in greenhouse gas emissions made by other sectors of the economy.

The report calculated that if aviation were to continue to grow at current rates, by 2037 the emissions from aviation would be equal to the total amount of emissions government targets envisage for the economy as a whole. The research was carried out by the Tyndall centre, a climate change research body.

Peter Ainsworth MP, who chaired the environmental audit committee in the last parliament, said: "We cannot allow the aviation sector to destroy our efforts to stop climate change and I will be calling on Alistair Darling to justify the government's inconsistency on this issue."

Air passenger traffic in the UK increased by an average of 6.4 per cent a year be-tween 1993 and 2001. However, the volume of emissions per passenger has decreased markedly, as manufacturers have incorporated fuel efficiency measures. Over the past 40 years, better airframes, larger aircraft, and improved engine technology have reduced emissions by 70 per cent per passenger per kilometre.

Measuring the impact of emissions from aircraft is complex, however. When emitted at altitude, greenhouse gases are thought to have a worse effect on the climate than when they are emitted close to the Earth's surface. There is also dispute over the size of this effect.

The government has pushed strongly for aviation to be included within the European Union's emissions trading scheme, and last week the European Commission gave a strong indication that this would be done.
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EU To Analyze Econ Impact Of New Airline Rules - Indus
10 June 2005

BRUSSELS (Dow Jones)--European Union Transport Commissioner Jacques Barrot has agreed to analyze thoroughly the economic impact of all future air regulations in response to complaints from airlines.

The European Regions Airline Association, or ERA, secured the commitment at a meeting with Barrot on Thursday in Brussels. Barrot's spokesman confirmed that such an agreement had been reached.

ERA Director General, Mike Ambrose, said recent "no votes" in French and Dutch referendums on the E.U. Constitution show "there is even more need for the E.U. to achieve better standards of regulation and greater transparency."

Last month the E.U.'s ombudsman opened an investigation into the Commission's literature publicizing new airline passengers' rights after ERA complained the information was "misleading and wrong."

The ERA represents 66 airlines, whose members include regional carriers like Aegean Airlines.

At the meeting, the ERA delegation asked the Commissioner to focus on "smart regulation" that would be performance-based, non-prescriptive and developed together with industry and consumers.

ERA President Antonis Simigdalas said times are still difficult for airlines and that they can't afford poor regulation. The carriers also are concerned about safety across the transport sector, and suggested the E.U. create an equivalent agency to the U.S. Transportation Safety Board. Barrot invited the delegation to put forward proposals to the Commission.
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Worried about airline pollution? Sell your car, says Ryanair boss
Andrew Clark
22 June 2005
The Guardian

The thorny issue of climate change has left most airlines bending over backwards to sound green. But Europe's largest low-cost carrier, Ryanair, has dismissed its environmentally nervous rivals as "lemmings".

Ryanair's chief executive, Michael O'Leary, has refused to support an industry-wide effort to limit carbon dioxide emissions. Asked yesterday what he would say to travellers worried about the environment, he replied: "I'd say, sell your car and walk."

This week, airlines including British Airways, Virgin Atlantic, easyJet, Flybe and First Choice, formed a sustainable aviation group aimed at cracking down on pollution, noise and harmful emissions.

Mr O'Leary said Ryanair would not be joining: "A lot of members of the sustainable aviation group won't be around in 10 years' time -that'll be their main contribution to sustainable aviation."

He described the coalition as an example of "high-fare airlines getting together to pursue policies blocking competition," adding: "The sustainable aviation group, God help us, is another bunch of lemmings shuffling towards a cliff edge."

Aircraft account for about 5% of carbon dioxide emissions and air travel is forecast to double within 25 years. There are fears that cheap flights could hamper efforts to fulfil Britain's commitments agreed at the Kyoto summit in tackling climate change.

The aviation industry favours an emissions trading scheme, allowing airlines to buy and sell carbon dioxide allocations. But Mr O'Leary said such a scheme amounted to a plot by airlines such as British Airways to punish rapidly growing rivals.

"British Airways won't be growing its existing emission levels because it's going nowhere - it's shrinking," he said. "We will be increasing our emissions over the next few years simply through growth in traffic."

Roger Wiltshire, director general of the British Air Transport Association, said: "They obviously don't want to engage in a debate over the environment, which is rather sad."

Environmentalists were less circumspect. Jeff Gazzard, of the GreenSkies Alliance, said: "Michael O'Leary is a recidivist, serial polluter and he should be arrested for crimes against the climate."
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EU to Seek Aviation Accords With Australia, New Zealand

EU to Seek Aviation Accords With Australia, New Zealand
By Victoria Knight Dow Jones Newswires
24 June 2005
The Asian Wall Street Journal

BRUSSELS -- The European Commission on Thursday said it plans to seek the power to negotiate new airline-access agreements with Australia and New Zealand on behalf of its 25 member countries.

The commission hopes future successes with New Zealand and Australia will set precedents for deals with other countries, such as the U.S., with which it is struggling to reach a similar accord.

Such deals would be groundbreaking on paper but small in commercial scale and unlikely to result in immediate change.

But change in the aviation industry occurs slowly. The first so-called open-skies aviation treaty was reached between the U.S. and the Netherlands -- a country with one airport and no domestic market -- in 1992. Since then, the U.S. has used that deal as a template in air pacts with more than 70 countries, including New Zealand.

The omens for European Union-wide deals with New Zealand and Australia are good. The commission on Thursday unveiled pacts giving all EU airlines access to existing traffic rights negotiated by individual EU countries.

EU Transport Commissioner Jacques Barrot described it as a "first step in our external aviation policy."

Given the bilateral deals in place, Germany-based Lufthansa, for example, could fly to Auckland from Heathrow Airport in London.

A new EU-wide deal would remove any remaining constraints on flight frequencies and foreign ownership.

EU governments are unlikely to oppose such a move. Australia and New Zealand are likely to support a broader deal because flag carriers Qantas Airways and Air New Zealand have long called for greater access to European airports.

The commission won its mandate to negotiate a new air treaty with the U.S. after a 2002 European court ruling that current bilateral treaties between individual EU countries and the U.S. are illegal. The court found the countries were discriminating against their fellow EU members because they allow access to the U.S. only for their national airlines.

The talks between the EU and Washington collapsed last year over market access by EU airlines to the U.S. domestic travel market.

The commission is likely to "achieve better results by pursuing agreements with smaller, but important, aviation partners, which are prepared to be more liberal, rather than going after deals with the U.S., Russia and China, which are more difficult to achieve," said Edmond Rose, an analyst at GCW Consulting in London.
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European Travel Easy But Info, Good Prices Lacking - Poll

European Travel Easy But Info, Good Prices Lacking - Poll
1 July 2005

BRUSSELS (Dow Jones)--Europeans find it easy to travel within the European Union, but complain about a lack of adequate information to help them plan their journeys and high ticket prices, according to an opinion poll presented by the European Commission Friday.

The majority are also unaware of their consumer rights, the poll found.

The Eurobarometer survey was carried out from Feb 9 to March 20, 2005 among 24,000 people across the E.U's 25 member nations. The survey, the first of its kind, was conducted to assess consumers' attitudes to different types of transport, given the doubling in travel since 1970. The poll covers plane, train, trams, buses and ferry.

The poll also aimed to gauge citizens' feelings on traveling within the E.U. since the removal of internal borders. Almost 70% of the people questioned said that traveling to other E.U. countries was easy. The highest level of satisfaction - 84% - was recorded in the Netherlands and the lowest in Latvia, where just 47% of people polled found traveling easy.

But incomplete and outdated travel information, cited by 44% of respondents, was cited as the major gripe by Europeans in the survey. Almost a third of respondents said ticket prices were too high. Europeans were most critical of rail services, with only 13% saying they were "very satisfied" with these services. The European Commission said the results of the survey support its efforts to establish integrated ticketing systems for international train journeys.

The survey also looked at level of awareness of European about their passenger rights. While two thirds of Europeans are aware that they have a legally-binding contract with a transport company when they buy a ticket from them, only 35% knew about the rights and obligations linked to the contract, with Belgians - 76% - the least likely to be informed.

When problems do arise, respondents showed the highest level of confidence in airlines - 53% - to rectify the situation, compared with just 35% for providers of urban transport.
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High tiket prices?! We have ryanair in Europe... you don't get anything cheaper than than anywhere in the world!
EU Backs Away From New Charges On Aircraft Emissions
18 July 2005

BRUSSELS (Dow Jones)--The European Commission Monday backed away from plans to impose charges on aircraft-tail pipe emissions, a retreat that underlines how cautious regulators have become in pressing costly environmental controls on business.

The Commission was expected Wednesday to unveil plans to reduce carbon dioxide emissions from planes as part of efforts to cut greenhouse-gas emissions and meet the bloc's commitment to the Kyoto Protocol accord on combating climate change. The three possibilities were a range of taxes or including aircraft emissions in an E.U-wide trading scheme from 2008.

But E.U. officials told Dow Jones Newswires that the commission's environmental unit, headed by Environment Commissioner Stavros Dimas, has decided to postpone the release of the proposals until the autumn, citing the need for "further consultations."

It is another sign of the Commission's more cautious and conciliatory approach to environmental issues. It is now toning down its REACH plan for testing chemicals and instead of attacking the U.S. on global warming, it has expressed a willingness to work with Washington.

Airlines are excluded from Kyoto, but a European Commission paper estimates that if unchecked, airplanes' emissions will exceed all other polluters combined by 2025. The U.S., which has pulled out of Kyoto, is opposed to including airlines in an emissions trading scheme.

European airlines, cargo carriers and manufacturers have lobbied hard against expensive measures. On Monday, six air associations that rarely work together - AeroSpace and Defence Industries Association of Europe, European Business Aircraft Association, European Express Association, European Regions Airlines Association, International Air Carrier Association and Association of European Airlines - launched an initiative called the Emissions Containment Policy. It is designed to showcase the efforts the industry is making in tackling emissions.

"The way to deal with emissions is not to stifle economic growth - certainly not if this merely reduces the competitiveness of European airlines," says Ulrich Schulte-Strathaus, Secretary General of the Association of European Airlines. "When linking aviation with climate change, there exists a misconception that a given increase in traffic will produce an identical increase in carbon dioxide emissions. This is simply not the case."

Air transport associations say they have decoupled emissions growth from traffic growth. Fuel consumption is expected to increase by only 3% in the coming years, whereas traffic will grow by at least 4%, Schulte-Strathaus argues.

In addition, manufacturers of aircraft and engines have for decades been developing progressively more efficient technologies, according to the associations. The industry aims to halve carbon dioxide production and aircraft noise per unit of production by 2020.

More efficient air traffic control systems could deliver a further 12% reduction in carbon dioxide, they say.
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EU Seeks Ways To Combat Airport Congestion, Reform Slots

EU Seeks Ways To Combat Airport Congestion, Reform Slots
15 September 2005

BRUSSELS (Dow Jones)--The European Union Commission Thursday said it was seeking ways to combat congestion at European airports, including a possible overhaul of takeoff and landing slots, to avert choking off economic growth.

Forecasts indicate increasingly congested airports in Europe will be unable to meet air-traffic demand in the coming years, said the Commission. To tackle the problem, the E.U. executive has sent a consultation paper entitled "Airport Capacity, Efficiency and Safety" to airlines, airports and air-traffic managers.

In the paper, the Commission suggests a range of options from improving slot allocation procedures, to promoting the use of regional airports and rail services. These initiatives would build upon existing legislation aimed at creating a Single European Sky and promoting the use of regional airports.

Any attempt to shake up the rules on slots is likely to ruffle feathers at national flag carriers. Until now, national flag carriers have inherited these precious rights and most trading is limited to swaps. Airlines regard slots as scarce resources in a big-money industry, and have rebuffed past efforts by the Commission to reform allocation procedures in favor of new entrants.

E.U. Transport Commissioner Jacques Barrot said: "We are working on Air Traffic Management and the Single European Sky to increase capacity in the sky. But if we do not address airport problems, this effort would be meaningless."

Every effort should be made to construct new airports where necessary and to use existing infrastructure more efficiently, Barrot added.

The E.U. in March 2004 agreed to unify its fragmented air-traffic-control system to reduce congestion and delays. And the E.U. last week approved long-awaited rules governing state aid to regional airports which the Commission says are designed to encourage regional development and aid the movement of air passengers.

Generally speaking, Europe's main airports, such as those in capital cities, are used by full-service airlines, while regional airports are favored by no-frills carriers such as Ireland's Ryanair Holdings PLC (RYAAY).

A recent study revealed that if air demand grows just below the current rate, more than 60 airports will be congested and the top 20 airports will be saturated at least eight to ten hours a day by 2025, according to the Commission.

Around 3.7 million flights a year will have to be canceled because of congestion if no action is taken, the commission adds.
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European Airports lead the World in Marketing Awards

European Airports lead the World in Marketing Awards

4 October 2005

For the first time European airports picked up awards in all four categories at the annual OAG Airport Marketing Awards, presented this week at a Gala Dinner at the annual Routes Conference in Copenhagen.

Winners in the four categories were announced as;

Munich - Greater than 25 million passengers per year
Athens International - 10-25 million passengers per year
Birmingham International - 5-10 million passengers per year
Berlin Airports - Less than 5 million passengers per year

Beating off tough competition from airports around the world, the European winners were praised for their fresh approach to marketing themselves and industry partners, and for successfully executing activities that have left a positive impression in the marketplace.

Announcing the winners at the Gala Dinner, Duncan Alexander, Managing Director, Europe, Middle East & Africa at OAG, commented “These Awards are highly prized by airports because they are voted for by their industry partners – the airline network planning community. OAG was delighted to sponsor the Airport Marketing Awards for the second year running to recognise the progress being made by airports selling their services to airlines and the public.”

In addition to recognising the highest standards in airport marketing, the Routes Conference also provides an opportunity for the international airport and airline route development community to gather at a single location and market their businesses face-to-face.
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European Parliament Backs Rights for Disabled Passengers

European Parliament backs rights for disabled air passengers
15 December 2005

BRUSSELS, Belgium (AP) - The European Parliament on Thursday voted for new rules guaranteeing disabled passengers the use of a wheelchair before and after they board EU flights.

The law -- which needs the support of EU governments before it enters into force -- is a response to Irish budget airline Ryanair Holdings PLC's treatment of disabled passengers.

Ryanair was widely criticized in 2002 for demanding a disabled passenger pay to use a wheelchair in the airport -- a service usually provided free of charge. In October, it removed several blind passengers from a flight, claiming its rules forbade more than four disabled people per flight.

The Parliament said airlines should also be responsible for disabled passengers before they boarded the plane, even at car parks.

"Disabled persons and those with reduced mobility will now enjoy the same rights as all other citizens to free movement, freedom of choice and to non-discrimination while travelling by air," said Robert Evans, the British Labour MEP who championed the law.

Airlines have said they support the new rules in principle but are worried about the higher costs, estimated as an extra 60 euro cents per passenger.
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European Low-cost Airline Bubble May Burst

European Low-cost Airline Bubble May Burst
20 December 2005
By Aude Lagorce

LONDON (Dow Jones) -- With more than 50 players, the European low-cost airline sector is set for a shake-up that will clip the wings of all but a few.

Analysts say the experience of the United States, where most low-cost airlines have failed, suggests that Europe cannot continue to support the slew of operators currently taking off from its runways.

"At last count, there were about 50 low-cost carriers in Europe, which is totally unsustainable," said David Stewart, head of the European office and co-founder of aviation consultancy AeroStrategy.

That total changes from week to week, as some carriers go belly up, while low interest rates, a glut of second-hand airplanes and the success of the market leaders continue to entice new entrants into the market.

Stewart, meanwhile, believes only three or four big low-cost carriers will still be flying in a few years.

The winners are likely to include the top three players: Ireland-based Ryanair Holdings PLC (RYAAY), the United Kingdom's easyJet  and Germany's Air Berlin. In the latest financial year for which traffic figures were available, Ryanair carried 27.6 million passengers, easyJet 24.3 million and Air Berlin 13.8 million.

In recent years, these three have eroded the turf of Europe's three largest legacy carriers, Air France-KLM (AKH), British Airways Plc (BAB), Germany's Deutsche Lufthansa , forcing them to shift their focus to their medium and long-haul operations.

Ryanair's shares are up over 50% year to date, while easyJet shares have added more than 91% in the same time frame.

In addition to these three, the survivors may include some of the low-cost subsidiaries of traditional airlines, such as BMI's BMI Baby. "Some will still be around because they have parents with robust businesses," Stewart said.

It's among the 30-odd players who share about 20% of European capacity that the bloodbath long forecast by Ryanair's fiery Chief Executive Michael O' Leary is expected to take its biggest toll.

"Most of the smaller carriers who are not supported by a rich parent are really skating on thin ice," said Doug McVitie of consultancy Arran Aerospace.

The strength of the balance sheet will largely determine which players, if any, keep flying, Stewart said.

But some niche players may come out on top. London-registered Wizz Air, for example, is seeking success by developing a niche in its own special airspace over Hungary and Poland.

But even that can be tricky, says McVitie, who warns that Ryanair and easyJet's competitors must remain small and fly low under the radar if they're to survive.

"If Ryanair notices a route that is really profitable for another carrier, they will go for it. And there's no chance the other airline will win," he said.

Tim Coombs, managing director for consultancy Aviation Economics, agrees.

"It would be suicide to compete head to head against Ryanair because nobody enjoys a cost base as low as they have," he said.

Ryanair saves money, for example, by having its cabin crew do double duty in keeping the aircraft clean.

In the end, most of Europe's low-cost airlines are likely to suffer the fate of Poland's Air Polonia, Dutch carrier V-bird, Italy's Volare and Ciaofly, for example, all of which have vanished from the radar.

"The market is seasonal, so unless you have a wide network of routes, you can't spread your costs during the slower season," said McVitie.

And compared with a few years ago, salvation is unlikely to come in the form of a takeover for these smaller carriers.

"There's no incentive for Ryanair or easyJet to buy anybody. It might have made some sense in Eastern Europe before some countries joined the E.U., but now there's really no point," said Stewart.

"As the big players can fly pretty much anywhere they like in Europe, why do they need to buy and suffer the pain of integration?"

Ryanair's O' Leary constantly emphasizes his preference for organic growth. The airline hasn't bought any rivals since it took out KLM-owned (AKH) Buzz in 2003, partly to acquire cheap aircraft.

The only takeover rumors in the industry stem from Germany, where DBA and Air Berlin are reported to be holding negotiations.

Some analysts warn that market leaders must be careful not to grow too fast.

The three largest European low-cost carriers, Ryanair, easyJet and Air Berlin, have a combined 300 medium-haul aircraft on order for delivery by 2010, with options for an additional 350.

Based on the industry calculation that each aircraft needs 250,000 passengers a year to break even, these three airlines will have to find 75 million new passengers just to cover these firm orders.

"It will be hard to generate such growth, that's for sure. But the challenge remains for traditional airlines to compete effectively with the low costs," said Stewart.

Some believe they may be taking on more than they can handle, especially as some airports continue to favor their nation's flagship carriers by limiting runway access to the low-cost airlines.

Low-cost airlines represent 40% of traffic at London airports against only 12% in Paris and 20% in Frankfurt. EasyJet and Ryanair have a mere 7% of intra-European flights at Paris Charles de Gaulle, Orly and Beauvais combined.

When the collapse of second-ranked French airline Air Lib in 2003 freed slots at Orly airport, most went to Air France rather than to low-cost carriers.

McVitie is more optimistic about the low-cost prospects, noting that even though growth is slowing somewhat, the European regional market has been so underserved for the past 30 years that Ryanair can still add many profitable routes to its network.
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There would definitely need to be a shake-out of the smaller operators. Is bmi baby profitable? With other recent examples from legacy airlines (Go by BA, Song by Delta, Zip by Air Canada), it seems some do well at first, but not most.
What are the other "low cost" airlines flying in Europe? The only one I can think of is Transavia.
FM 2258 said:
What are the other "low cost" airlines flying in Europe? The only one I can think of is Transavia.
German Wings
Aer Lingus
Alpi Eagles

This just off the top of my mind but am sure there are a lot more.
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