Is this the end of budget travel?

Level 2 Intermediate
1

Warmer: Airlines

What do these acronyms stand for?

BA

QANTAS

KLM

Whatdoyouknowaboutthesecompanies?

Financial key words

Matchthekeynancialwordsandphrasesfromthearticlewiththedenitions.Theparagraphnumbersare
giventohelpyou.
chargebankruptadministrationcovercosts

addonfee

budgetbreakeven

affordable

protable

economy

gobust

1. An adjective meaning cheap which is only used before a noun: __________________. (title)
2. An adjective used to describe a company or person who has admitted they have no money:
__________________. (para 1)
3. When something is __________________, it is cheap enough that most people can pay for it. (para 1)
4. This is what happens to a company when it loses all its money and ceases to operate: __________________.
(para 2)
5. Whenacompanydoesthistheyneithermakeaprotnorlosemoney:__________________.(para2)
6. To ask someone to pay an amount of money for something you are selling to them or doing for them:
__________________. (para 3)
7. __________________ travel is the cheapest type of air travel available. (para 4)
8. An additional charge: __________________. (para 5)
9. When a business makes money, it is __________________. (para 7)
10. To have enough money to pay for something: __________________. (para 6)
11. A company which is in severe trouble, but still with some hope of recovery, may be put into

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NEWS LESSONS / Is this the end of budget travel? / Intermediate

Macmillan Publishers Ltd 2008

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__________________. (para 8)

Is this the end of budget travel?

Level 2 Intermediate
5

Add-on fees for bags and refreshments are usual

in the budget airline industry, but long-established
airlines have, up to now, refused to charge for these
services in case they lose out to competitors.

Agreeing with recent remarks made by the BA boss,

Willie Walsh, McCulloch said fares would also have
to rise if airlines were going to stay in business.
With oil trading near $130 a barrel, most airlines are
technicallyunprotable.BAandVirginAtlantichave
increased fuel surcharges over the past week in an
attempt to cover their costs.

According to analysts at the investment bank

Credit Suisse, the budget airlines will have to take
action. Without buying up fuel in advance we do
notbelievethatanyairlinecanbeprotableinthe
medium term not even easyJet and Ryanair, said
Credit Suisse.

Ryanairs chief executive, Michael OLeary, said

on Tuesday that the airline, which cut fares by
around1%lastyear,wouldsurvivethisdifcult
time. People are getting more price sensitive,
sotheyreyingwithusinsteadofwiththemore
expensive business-only airlines which are going
bust, said OLeary, referring to Silverjets fall into
administration last Friday. Silverjet, a UK-based
transatlantic airline, became the latest airline to
enteradministrationduetonancialproblems,
joining eight US airlines and two other airlines that
operatedightsfromtheUK.

In the long term no industry can exist if it doesnt

cover its costs, said Toby Nicol, easyJets director
of communications. Fuel accounts for about a
third of airline budgets, and the recent steep price
increase is causing enormous problems for an
industry that is still recovering from the effects of the
9/11 attacks.

Dan Milmo, Houston

June 6, 2008
1 The list of bankrupt airlines is growing by the week,
but the biggest change in the industry could be the
end of cheap fares. A decade of low ticket prices
hasenabledpeopletoyeasilytoothercountries
for affordable holidays and cheap weekend breaks.
But airline executives warn that fares have to rise.

2 On Tuesday, Ryanair warned that the high cost of

oil would force it to raise fares by about 5% this
year. The budget airline, which has warned that
many of its rivals may soon go bust, admitted that
it will only break even this year if oil remains at
around $130 a barrel. European budget airlines
RyanairandeasyJetrelyonlowfarestolltheir
aircraft. They then squeeze more money out of
passengers by charging for add-ons such as
luggage check-in and hotel bookings.

3 British Airways, Air France KLM and Qantas

arehopingtondtheirwayoutoftroublecaused
by soaring oil prices by raising fares, although
a leading industry executive warned that if this
isnt successful, they could also start charging
passengers for baggage check-in and food. The
head of one of the worlds biggest airline alliances,
oneworld, whose members include BA and Qantas,
said the group would consider changing their rules
to allow national airlines to charge for extras similar
to the way that budget airlines do.

4 If the industry moves to a standard of charging

for an apple juice in economy class, oneworld
alliance will move in that direction too, said John
McCulloch, oneworlds managing partner. When
he was asked if baggage check-in charges were
also likely, he added: Airlines would argue that its
the right way to do it. Some already charge 20 a
bag and 10 for a meal. We are going to see much
more of that.

Guardian News & Media 2008

First published in The Guardian Weekly, 06/06/08

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NEWS LESSONS / Is this the end of budget travel? / Intermediate

Macmillan Publishers Ltd 2008

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Bankruptcies increase as major airlines consider

charges for baggage and food

Is this the end of budget travel?

Is this the end of budget travel?

Level 2 Intermediate
3 Comprehensioncheck
According to the article, are these sentences True (T) or False (F)?
1. Ryanair and easyJet are budget airlines.
2. Nationalairlinesareinitiallytryingtondawaythroughthecrisisbyraisingfares.
3. If this doesnt work they will consider charging for onboard food and baggage.
4. If oil prices go above $130 a barrel, most airlines will have to sell their planes.
5. National airlines no longer want to offer business class.
6. About 33% of airlines costs go on fuel.
7. Michael OLeary is the CEO of British Airways.

4 Vocabulary: Pronunciation
Whichofthewordsbelowtintothispronunciationpattern?
oOoo

e.g. competitors

executive

alliance

affordable

economy

administration

protable

recovering

passengers

Drawstressbubblestoshowthepronunciationpatternsoftheotherwordsinthelist.

5 Discussion
Howoftendoyouy?Ifairfaresgoup,doyouthinkyouwillgoonfewerholidaysorbusinesstrips?Do
youthinkthat,ingeneral,peoplewillconsiderusingotherformsoftransportandyless?

6 Webquest
BAandQantasaremembersoftheoneworldalliance.Whoaretheothereightmembers?

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NEWS LESSONS / Is this the end of budget travel? / Intermediate

Macmillan Publishers Ltd 2008

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WhoorwhatisSkyTeam?