Why do low cost airlines go bust when they charge us fuel surcharges?

Question

Another "low cost airline" has gone bust...reason quoted, the rise in the cost of fuel...can someone explain to me how this can be the case... when the airlines always expect us to pay the fuel surcharges!

Has anyone experienced a case where an airline has reduced the cost...because the cost of fuel went down??

Answer 1

As they slap on the fuel surcharge (which they really have no choice to do in order to stay afloat), the net cost for the client is increased, thus reducing demand. Less demand, less sold tickets, less airlines in operation.