Originally Posted by
boredintheairport
But surely you're talking about different markets? TAP baulking and withdrawing MAN-GRU (given you said South America) because an LCC cut the price of MAN-LIS fares would be like KLM not offering MAN-AMS-PVG because Flybe offer MAN-AMS for €50.
If TAP really has a useful market to otherwise unserved destinations then they will continue to operate, otherwise they will not. As long as Ryanair aren't offering MAN-LIS-GRU I don't see the issue.
The issue is that airlines often make more money from straight O&D traffic to/from their hub than connecting over the hub (for a given ticket). TP probably require MAN-LIS bookings to supplement anyone travelling MAN-LIS-XXX to make the MAN-LIS route work. Losing a section of the O&D market to LIS will make the MAN-LIS less likely to be profitable.
Let's not forget, however, that some airlines are able to stimulate/grow a market by adding a new destination, rather than purely taking a share of the existing traffic flying from, say, the North West to that destination by current means (indirect, using other UK airports etc). JUst because there is low existing demand, doesn't mean that it will always stay as such... but it may require a punt from the airline, using historic data from another similar route, to take the plunge in the first place.