Hundreds of Northern Ireland air passengers have been caught up in the aftermath of the collapse of Zoom Airlines.

As of Thursday evening, the low cost airline ceased to exist — and without any prior warning hundreds of passengers were left stranded as all flights were grounded with immediate effect after the company went bust blaming the spiralling cost of aviation fuel.

The news that the airline has gone into administration was made even shocking given the fact that the announcement came exactly one month after Zoom launched its summer 2009 schedule, saying it remained committed to the Northern Ireland travel market.

And air passengers were dealt a further blow as it emerged that Aer Lingus is preparing to introduce sweeping cost-cutting measures after it reported soaring losses on Thursday.

The former State airline sparked fears of widespread job and pay cuts when it announced the need for a “fundamental overhaul to its cost base”.

It comes after Aer Lingus reported losses of €22m for the first half of the year, blaming spiralling oil prices for the downturn in the company’s fortunes.

The airline also warned future losses could be substantially higher unless changes are made.

So, does this spell the end of budget airlines?

It is true that the credit crunch has gripped Northern Ireland, with many householders struggling to pay their bills.

And with many motorists cutting down on unnecessary car journeys due to the rising cost of petrol and diesel, it comes as little surprise that airlines are also feeling the pinch.

This is evident, says Michael Smyth, the head of the schools of economics at the University of Ulster, in the way that some of the best known budget airlines have revamped their flight timetables in recent months.

“The rising price of jet fuel has been with us for nine months, six months certainly, and you can see airlines have adjusted their schedules accordingly,” he said

“Ryanair have cut flights back on a lot of routes in the winter and Easyjet have done the same. Most of the low cost airlines are trying to do the same. Long haul travel would be hit more by the fuel costs than shorter haul and I believe the question is why it took so long for Zoom to react.”

Certainly, as Zoom was extending the flights available to people in Northern Ireland in July, other budget airlines — more firmly established — were cutting back on the destinations available.

Another problem facing an airline such as Zoom, Mr Smyth believes, is the fact that it offered transatlantic flights — which in today’s current economic climate is not as lucrative as the days when people in Northern Ireland had a larger amount of disposable income.

But surely this means that people across Northern Ireland will also be reticent to splash out on other luxuries, such as weekend trips to the likes of Paris and Rome? Could the credit crunch — and threatened recession — spell the end of all cheap flights abroad? Not necessarily so, according to Mr Smyth.

“I was pretty shocked by what happened to Zoom myself and I don’t believe this is the beginning of the end,” he says.

“There are some budget airlines which came off the back of the increasing labour flows from Eastern Europe which are now rapidly diminishing. I think there is a question as to the long-term viability of airlines which provide flights to the likes of the Czech Republic, Romania and Bulgaria.

“The likes of Ryanair and Easyjet are selling flights for as little as £1 at the moment so I’m not sure the cost of the flights is going to go up as fuel prices rise. Increasingly, the budget airlines don’t make their money from the actual flights.

“The money is made from luggage handling and add-ons. They have had a more robust business model than the likes of Zoom and as long as this continues I don’t see the end of low-cost airlines.”

However, given the horror stories being told in recent days by stranded Zoom passengers is it likely that people across Northern Ireland are going to hand over their hard-earned cash to pay for a flight which may subsequently be grounded?

The problem with booking a flight with a low-cost airline is that — should the company encounter financial disaster like Zoom there is little or no protection for the customer — either in terms of getting a refund or ensuring passengers arrive at their chosen destination without shelling out a small fortune for an alternative flight.

Everyone knows that budget airlines offer a “no frills” service — but will people across Northern Ireland continue to opt for cheaper flights when there is no guarantee they will ever reach their chosen destination?

After all, surely the whole point of using a budget airline in the first place is to save money?