Airport Monopoly costs jobs - RA not bluffing

[ethernet]

Ryanair to cut flights, close bases | The AustralianRYANAIR, Europe's biggest budget airline, yesterday said it would ground aircraft for the northern winter and warned it expected to carry almost 1 million fewer passengers over the season. The carrier ... claimed the cost of using Stansted airport had forced the reduction. Those 1 million passengers will have a big negative tourist impact in those places that rely on winter trade.

Australia is cutting back - the question is how many jobs have been lost due to Airport monopolies. At least RyanAir has the balls to tell it as it is.

 

[Mal]

At least RyanAir has the balls to tell it as it is.

Is RyanAir telling the truth? They've been known in the past to make up some flimsy spin to hide all sorts of announcements.

Perhaps they just want to exit some routes, sack some staff or close bases because not enough people want to fly these routes.

 

[ethernet]

Ok, I think quite right there, but consider the differences to same time last year. In an expanding market, with arguably superior management, they are grounding planes to 'loose less', and have pulled out of certain locations. If they could have shifted things, they might have.

Ryan will also be thinking OK, grounded plane, BAA airport looses a takeoff fee, and a landing fee (if destination is another BAA entity). Their bargaining power is more. (Their staff may not even get CPI increases).

Lets see, BAA's job is to screw as much money out of airlines as possible. BAA are hurting because the share and credit market have increased their costs, and probably gas and electricity prices are up - guessing 16%. They don't want to be Babcocked.

Airlines, however have been walloped by near doubling fuel - 80-140bbl, and keeping pilots has been tricky. Mean airlines like RA, simply have no fat. Unless landing and airport costs are lowered (sharing the pain), something will give.

RA are not making up the fuel price causes, this is clearly obvious. Airport Authorities should wear some pain. The issue is that a loose-loose situation HAS developed, with jobs and tourism hit. The bottom line is, some overpriced real-estate in destinations supported by affordable airfares, is soon going to take a hit, as well as airport parasite industries (Taxi, parking, duty free, fast food).

However if both play hardball, the only certainty is jobs will be lost AND some speculators in destinations being axed, may take a bigger hit, faster than they imagined.