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Cheap Airlines Are Losing Altitude

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Expensive oil could end up spelling the end for once-celebrated budget airlines. Increasingly, Air Berlin, easyJet and co. are running into major difficulties. And getting rid of excess ashtrays won't be enough to save them.

Last fall and winter was not a happy time for Lufthansa CEO Wolfgang Mayrhuber. But it wasn't just the uncooperative weather and series of strikes that were making his life so miserable. Mayrhuber, a 61-year-old originally from Austria, faced heavy criticism for being too hesitant and overly risk-averse, all because he passed up opportunities to acquire charter airline Condor and Italian competitor Alitalia.

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