Budget Airline Blog

British Airways’ boss Willie Walsh said his airline will survive the current surge in oil prices, but warned other operators will fail and predicted fare rises across the industry.

As oil prices continue to set records, reaching $135 a barrel yesterday, airlines are coming under increasing pressure from soaring costs.

Several airlines, including Oasis and US operator Eos Airlines, have filed for bankruptcy recently, as the oil surge has hit the smaller, budget companies hardest.

UK business carrier Silverjet may be the next victim, as its shares were suspended this morning as the company admitted a loan is urgently needed to continue trading.

Sri Lanka’s state-run budget carrier has suspended operations indefinitely because of a lack of planes, an aviation official said Sunday.

The budget airline, Mihin Lanka, has been dogged with financial trouble since it began commercial operations last April.

“They (Mihin) don’t have an aircraft to fly passengers since the beginning of this month,” Sri Lanka’s civil aviation chief, Parakrama Dissanayake told AFP.

Mihin’s last aircraft, an Airbus A321 taken on lease, was reclaimed by its Bulgarian owners at the end of April, as the airline was unable to make payments, an airline industry source, who declined to be named, said.

South African budget airline Nationwide stopped operations with immediate effect Tuesday because of financial problems.

The company has a fleet of 17 planes which mainly cover domestic and short haul routes, with flights to London three times per week. It was not immediately clear how many passengers were stranded.

“Our cash-flow has become critical and as a result we have decided to voluntarily cease all flight operations until further notice,” Nationwide chief executive Vernon Bricknell said in a statement carried by the South African Press Association.