There have predictions for a while of a shake-up among the multiple budget airlines criss-crossing Europe and it looks like the first consolidation is coming soon. Spanish no-frills airlines Vueling and Clickair announced this week that they were going to merge.
“The new company would trade under the name Vueling and continue to be headquartered in Barcelona,” says the Reuters article linked above. “A combined company would have just short of 50 planes that, on a pro-forma basis, flew 10.7 million passengers last year.” I assume that some redundant routes will be cut down, however, in order to make the merger a cost saver. Also, new high-speed train lines have opened up in Spain, reducing demand on certain domestic flights.
The Wall Street Journal quoted a Citigroup report predicting that several budget airlines in Europe were expected to fail this winter. Many airlines have seen their stock prices fall 75% as intense competition and high fuel prices have taken their toll. The strongest ones are the two that started it all: Easyjet and Ryanair. Some analysts expect them to take advantage of the situation, using their cash reserves and extra planes to quickly jump on new routes that open up after an airline failure.
It could get ugly after the summer travel season is over, so if you’re going to fly within Europe on some airline you’ve never heard of later this year, booking months in advance may not be the best idea…
