The gravy train is turning into a graveyard. After a decade of phenomenal growth, Europe's low-cost airlines are struggling. There are too many seats available on too many aircraft for rock-bottom prices which are simply too low to be profitable.
Ryanair's chief executive, Michael O'Leary, this week predicted a "bloodbath" as smaller airlines go to the wall. He was speaking as Ryanair revealed a €3.5m (£2.3m) loss for the three months to March - its first dip into the red since it became a low-cost carrier in 1989.
In O'Leary's apocalyptic vision, the "mother and father of all fare wars" could leave just two survivors - his own operation and its largest low-cost rival, EasyJet.
"There will be one or two low-fares airlines to compensate the three high-fares rapists - British Airways, Lufthansa and Air France," he declared.
The soaring price of petrol has added to the financial squeeze. Ryanair, EasyJet and BmiBaby have so far chosen to protect their cut-price reputation rather than joining British Airways in imposing a levy on ticket prices to cover high oil costs. But a long-term increase in fuel prices could force them to edge up fares, and now may be the time for customers to cash in on low prices.
Casualties are already piling up. In April, Planet Air called in liquidators after flying for 14 months from Leeds Bradford airport. Then last month, Birmingham-based Duo went bust, leaving 50,000 passengers with forward bookings as unsecured creditors.
In Ireland, Shannon-based SkyNet grounded its fleet on May 25, two weeks after sacking half its pilots. It was the third Irish low-cost operator, after JetGreen and JetMagic, to cease trading this year.
Elsewhere in Europe, the failures are numerous. Goodjet, Flying Finn and Ciao Fly have briefly graced the continent's skies before shutting down.
The succession of strugglers has left consumer watchdogs with a headache. Unlike tour operators, low-cost airlines have no obligation to lodge a bond protecting passengers if they go out of business. Travellers with advance bookings can be left out of pocket or worse, stranded hundreds of miles from home.
Chris Mason, a spokesman for the Civil Aviation Authority, says: "There is no protection. The only cover you could have is if you bought your ticket using a credit card and the fare was in excess of the usual £100 guaranteed minimum."
British travellers are more enthusiastic than any others in Europe about low-cost air travel and there are a collection of home-grown airlines varying from Air Scotland, which boasts just one leased aircraft, to Ryanair, which is Irish but has its biggest base at Stansted.
According to airline experts, the first, easiest, phase of growth is reaching an end as the obvious geographical territory has been snapped up.
Tom Dalrymple, the entrepreneur behind the Scottish low-cost carrier Fly Globespan, says: "The low-cost model so far has been developed in terms of carving out your own section of turf. Very few of them have actually gone head to head. But there aren't a lot of opportunities left to enter the market without going head to head."
Traditional carriers such as British Airways, Air France and Lufthansa have lowered many fares to become credible competitors for casual travellers.
But the need for growth is as strong as ever for EasyJet and Ryanair, both of which are taking delivery of more aircraft every month from Airbus and Boeing, under long-term orders intended to secure their positions as European giants.
The smaller budget airlines each insist they are fulfilling "niches" which leave them relatively immune to attack.
Mike Rutter, marketing director of Exeter-based FlyBe, says: "Our view is that there may very well be a bloodbath, but we doubt it'll affect us."
He says FlyBe's concentration at provincial airports such as Southampton, Exeter and Birmingham makes it less vulnerable to attack: "Our model is very different to EasyJet and Ryanair. Eighty percent of our flights are domestic, along what we call the 'backbone of Britain."
BMI's low-cost offshoot, BmiBaby, is pursuing a "franchise" model by cooperating with other carriers on new routes. FlyGlobespan is pinning its hopes on selling bespoke packages including accommodation and car hire, while MyTravelLite has a big Midlands following and is trading on the name of its tour operator owner, MyTravel.
But experts agree that not all can survive. This winter could be crucial, as weaker carriers struggle to find the cash to survive the fallow colder months.
Stephen Furlong, an airlines analyst at Davy Stockbrokers in Dublin, predicts that fares will fall by 10% next year, following a drop of some 16% this year, as competition becomes increasingly desperate.
"This winter's going to be very difficult for low-cost airlines - particularly for those which don't make any money, which is pretty much all of them," he says.
In the short term, a trip to the Costa will be cheaper than ever as fares plummet to record lows. But travellers should beware that their return journeys might just be in the balance.
Air Scotland
Bases: Edinburgh, Glasgow.
Destinations: 6.
Owner: Greece Airways.
Aircraft: 1.
Claims to 'fly the flag' as Scotland's embryonic national airline and is described on its website as 'totally Scottish'. But it is operated by a Greek company using a single second-hand Boeing 757 leased from German-owned Thomas Cook Airlines. Has a modest route network and faces intense local competition.
air-scotland.com
0141-222 2363.
BmiBaby
Bases: East Midlands, Cardiff, Manchester, Teesside, Gatwick.
Destinations: 20.
Owner: Bmi British Midland.
Aircraft: 14.
Well established as Britain's third largest low-cost airline, carrying three million passengers last year. Bmi expects the operation to break into profit this year. Recently struck a deal with Air Wales to operate flights to Ireland and hopes to expand using a similar franchising model.
bmibaby.com
0870 2642229.
EasyJet
Main bases: Gatwick, Luton, Stansted, Bristol, Newcastle, East Midlands.
Destinations: 44.
Owner: The family of Stelios Haji-Ioannou has a 40% stake.
Aircraft: 89.
EasyJet's share of the market plunged by 25% last month following a warning of weak bookings. But the airline has a market value of £800m and made a profit of £51m last year. Has the firepower to withstand a price war and to squash smaller operators.
easyjet.com
0871 75001001.
FlyBe
Base: Exeter.
Destinations: 42.
Owner: Family trust of the late Blackburn Rovers tycoon Jack Walker.
Aircraft: 31.
Claims its niche is the 'backbone of Britain', from provincial airports such as Exeter, Southampton and Birmingham. Says it made a profit of 'a couple of million' last year, but faces long-term uncertainty as the Walker family trust wants to sell up.
flybe.com
0871 7000535.
FlyGlobespan
Bases: Edinburgh, Glasgow.
Destinations: 11.
Owner: Scottish travel entrepreneur Tom Dalrymple.
Aircraft: 5.
Globespan is pinning its hopes on selling accommodation alongside flights in a low-cost package. Founder Tom Dalrymple has an estimated fortune of £35m and is deter mined to crack the no-frills market. But he is not the only operator keen to expand into hotels and car hire.
flyglobespan.com
0870 5561522.
Jet2
Base: Leeds Bradford.
Destinations: 12.
Owner: Dart Group, which controls the cargo airline Channel Express.
Aircraft: Uses Channel Express's fleet of 14 Boeing 737s, which can be converted from freight to passenger use. Recently carried its millionth passenger and saw off competition from Planet Air, a failed rival at Leeds Bradford. Has the financial backing of a parent company with a turnover of £200m but remains a small player with only one base.
jet2.com
0870 7378282.
MyTravelLite
Base: Birmingham.
Destinations: 9.
Owner: Holiday company MyTravel.
Aircraft: 2.
Has amassed a strong following in the West Midlands, but parent company MyTravel, is in financial trouble with debts of £650m. The group's cruise ships have been axed and its charter airline fleet slashed. Little money is likely to be available to invest in the low-cost airline.
mytravellite.com
08701 564564.
Ryanair
Main bases: Stansted, Glasgow Prestwick, Dublin.
Destinations: 84
Owner: The founding Ryan family still owns 7% of the shares. The rest are in the hands of investors on the Dublin stock market.
Aircraft: 72.
The oldest, biggest and wealthiest of Europe's low-cost carriers has hit turbulence. It is suffering from fierce price competition and from a ruling by the European Commission that its cut-price deals with airports could be illegal. But it remains among Europe's most profitable airlines and is here to stay.
ryanair.com
0871 2460000.
ThomsonFly
Base: Coventry.
Destinations: 11.
Owner: Part of the German travel empire TUI, which owns Thomson Holidays and Britannia Airways.
Aircraft: 4.
Had to fight off a challenge from the local council to fly from a prefabricated terminal at Coventry's freight airfield (the council claimed it lacked planning permission). Planning a second base at Doncaster Sheffield airport but as a late entrant into the market it will struggle to find much untrodden territory.
thomsonfly.com
0870 1900737.
