Those passengers sipping the better vintage wines at the front of an aircraft have subsidised economy travellers squashed in cattle class down the back for decades.

A £1,500 ticket to fly business class across the Atlantic has managed to offset the modest £20 profit each way that British Airways and Virgin Atlantic are estimated to make on every economy seat between London and New York.

But as the price of oil shot through $130 a barrel this month and shows no sign of slowing, that business model is broken.

Struggling to stay competitive amid falling passenger numbers, airlines have been loath to raise fares. Instead, a “bargain” £266 return air fare secured on the web between Heathrow and JFK has been supplemented with extra charges for bags checked in, for window seats and fuel surcharges. The extra free glass of wine went long ago for most airlines. There is a limit to how much airlines can patch over the discrepancy between their soaring costs and revenues.

Virgin Atlantic estimates that a transatlantic flight costs an airline between $200 and $400 per passenger, depending on how efficient (that is new) its aircraft is, and how well the company has hedged against the oil price.

With the number of business travellers falling at its fastest rate since 2002, the front end of the jet can no longer pick up most of the bill. And it is going to get worse.

Consumer confidence is widely perceived as an accurate way of plotting the trajectory of demand for air travel. Ominously, US statistics this week pointed to the lowest level of consumption since the 1950s in America.

While airlines have experienced financial turbulence before, it is only seven years since they were forced to cut costs through redundancies after the September 11 2001 terrorist attacks. There is less fat to trim this time around.

As Delta, the US airline pointed out, cutting capacity is an inevitability. The carrier believes that most airlines will have to ground fleets to stem the losses incurred on many routes.

The other option is for airlines to consolidate and remove overlapping costs such as headquarters, ground staff and duplicated routes. So far, this has failed to work.

United Airlines, fresh from the Chapter 11 bankruptcy protection it sought after the September 11 2001 attacks, tried to merge with Continental but talks failed. It then looked at opening negotiations with US Airways, which had also attempted to do a deal with Continental. The heads of United and US Airways said yesterday that merger talks had been suspended. “We are evaluating other options,” Glenn Tilton, chief executive of United, said.

MIT, the US university, is not alone in believing that a major American airline will go bust within a year. There may be many more stranded passengers, stuck with worthless tickets issued by bust airlines before the year is out.

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