Expensive jet fuel may drive some start-up airlines to the wall but for easyJet it is not the end of the world, the founder and non-executive director of Europe's second-biggest budget carrier said.
Over 60 short-haul low-cost airlines now battle for customers in Europe, up from seven three years ago, and the stiff competition combined with high fuel costs is putting profits of many of them at risk.
Stelios Haji-Ioannou, who founded the airline in 1995, said near-record oil prices seemed to be discouraging new airline ventures and could mean more failures.
"I don't know if it's coincidental but I've noticed fewer and fewer start-ups," he said on the sidelines of the World Economic Forum in the Red Sea resort of Sharm El-Sheikh.
"With a start-up that is 20 per cent away from break-even, the backers may say 'let's put in more money'. With the higher fuel price it might be 30 per cent away from break-even, so they might decide not to."
EasyJet's own pre-tax loss widened in the six months to the end of March to £40 million from £22 million previously, but earlier this month the airline said that its prospects were improving, helped by cost cuts and sales of in-flight drinks and online insurance.
Mr Haji-Ioannou said the results also showed some evidence that people are beginning to pay a bit more for higher fuel prices.
"For a company that charges on average £42 to £43, the increase in the cost of fuel in the last year or so is another £2 to £3, so in the scheme of things it's not fatal," he said.
EasyJet was the subject of fevered takeover speculation after an Icelandic firm built a stake in the airline, but the talk died down last month when it sold the stake.
Mr Haji-Ioannou, who owns 16.6 per cent of the airline, while his brother and sister own about 12 per cent each, said he had no plans to sell out.
"I've always said I'm not a seller at this price and the price hasn't moved materially since I said that," he said. "It's business as usual."
He voiced confidence in the growth prospects of easyJet, which wants to capitalise on moves by countries neighbouring Europe to boost tourist arrivals through Open Skies agreements. The carrier, known for its bright orange planes, begins flights to Morocco and Turkey this year and hopes to add Egypt before long.
"In this region I've the sense that it's only a matter of time before it becomes one big open sky," he said. "Governments are putting millions into advertising campaigns. But creating demand is not enough; it has to be accessible as well."
Mr Haji-Ioannou, the son of Greek Cypriot ship owner, said this month he planned to invest up to $400 million in as many as four new cruise ships for the Greek islands, where he sees fresh market opportunities.
The decision marks are major expansion of his easyCruise operation, which took off last year and now has just two vessels. Mr Haji-Ioannou said it is too early to consider a flotation of the cruise business.
"To reach a certain size that public markets would be interested in you'd have to wait until 2010," he said. "I would not rule out private equity in between."