In for a bumpy ride?

It looks like the era of low-cost flying is hitting turbulence. Last month Oasis Hong Kong, one of the first low-cost long-haul carriers, went bust and today American Airlines revealed a gloomy outlook of its own. The world’s biggest airline is sacking thousands of staff, axing flights and introducing baggage charges. The sky high cost of oil has added $3 billion to AA’s costs this year and the company is urging other carriers to take immediate action. Gerard Arpey, the airline’s chief executive, warned: “The airline industry was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak US economy.” And, with the price of oil expected to hit $200 a barrel, it doesn’t look like conditions will improve for the world’s airways for a long time to come. One must wonder whether this is the death knell for the golden age of cheap air travel after less than a decade.