Budget Airline Blog

Passengers will have to pay for extras, from meals at £10 a head to charges for each bag as major airlines try to cover the soaring cost of oil.

Even ringing a call center to book a plane ticket could incur a charge.

The stark warning comes from John McCulloch, managing partner of Oneworld Alliance, the group that represents world’s leading airlines.

It comes just days after British Airways announced the biggest fuel surcharge increase in its history.

He predicted mainstream carriers will have to fall into line with their no-frills rivals as they look to cut costs. The same has already happened in America.

“People have to realise it is going to get more expensive to travel,” said Mr McCulloch, whose group includes British Airways, Cathay Pacific, Iberia and Qantas.

“Airlines would argue that it is the right way to do it. It will be £20 for a bag, £10 for a meal, you are going to see much more of that.

“I think charging for meals will become standard practice.”

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.

OasisHongKong Airlines, a long-distance budget carrier that tried to offer premium service and spacious seats at low prices, suddenly went into liquidation Wednesday and canceled all flights, the fourth budget carrier to halt operations in the past week and a half.

The bankruptcy filing by Oasis stranded thousands of passengers in Hong Kong, London and Vancouver, British Columbia. Many of the would-be passengers stuck in Hong Kong are children trying to return to British boarding schools after going home for the spring break.

High jet fuel prices have taken a heavy toll on the airline industry and particularly on budget carriers trying to compete on price with low profit margins. The other three to shut down since March 31, all in the United States, are Aloha Airgroup, ATA Airlines and Skybus Airlines.

Singapore’s discount airline Tiger Airways has confirmed speculation it will be the next carrier to enter the transtasman market.

Speaking to the Australian Aviation Press Club in Sydney, chief executive Tony Davis said the Australia-New Zealand service was on the radar.

Earlier reports said Tiger was eyeing Palmerston North, among other New Zealand airports, where competition was low or non-existent.

Mr Davis said Tiger, which is part-owned by Singapore Airlines and Ryan Air, would take delivery of two A319 aircraft toward the end of the year as it prepared to launch more services to regional destinations in Australia.

Tiger would also add a fifth A320 jet to its Australian fleet next month, which together with the A319s would expand its seating capacity by 65 per cent.

Korea’s two largest airlines have joined the low-cost carrier business, with Korean Air having founded Air Korea and Asiana Airlines having bought a controlling stake in Pusan International Air, which has launched budget carrier Air Pusan.Jeju Air and Hansung Airlines, which have been operating domestic services for more than two years, both plan to launch international services in the second half of this year.

Even foreign budget airlines have turned their eyes to Korea’s domestic market. Tiger Airways, a budget affiliate of Singapore Airlines, is planning to advance into Korea by joining forces with the city of Incheon.

The Philippine budget airline Cebu Pacific will start operating a direct fly between Macao and the central Philippine city of Cebu in April, the company announced Monday. The Cebu-Macao flight is initially twice a week (Tuesday and Saturday) starting from April 5 and will expand into a four-times weekly (Tuesday, Thursday, Saturday, and Sunday) service beginning from May 8, 2008.

On most days, one-way fare between Macao and Cebu starts from 1,499 pesos (37.48 U.S. dollars) exclusive of taxes and surcharges, the airline said.

“We are happy to provide our Filipino overseas workers in Macao a direct service to Cebu that will easily link them to the islands in the Visayas and Mindanao. Our very low fares will allow them to come home more often,” Lance Gokongwei, president of Cebu Pacific, said in a statement.

Founded in 1996, Cebu Pacific overtook the Philippine Airlines to become the number one airline in the Philippines last year in terms of passengers delivered on domestic routes. It flies to 12 international destinations including three Chinese mainland cities– Xiamen, Shanghai and Guangzhou.

Yes Air Downunder looks like the newest airline to go long haul on a budget!

The airline is expected to go live later in 2008.

UK to Aussie and NZ on the cheap!