From today's Scotsman:
Go to cut Scots flights
Andrew Murray-Watson Senior Business Reporter
GO, THE low-cost airline and former subsidiary of British Airways, is throwing in the towel in its Scottish battle against rival no-frills carriers.
The airline announced it is reducing frequency on its routes to Belfast from Edinburgh and Glasgow and from Edinburgh to Dublin, from three flights a day to two with effect from 3 December.
The airline has been fighting for customers against easyJet on the Belfast service and Ryanair on flights to Dublin.
The reduction in Go services to Dublin from Edinburgh comes barely a month after the route was launched and is an embarrassing setback for the company in its bid to challenge Ryanair in its heartland.
Last month, Go offered return flights from Scotland to Dublin for £35 in a bold move to capture new territory, only to be trumped by Ryanair, which countered with prices as low as £10 return.
The Scottish cutbacks will be widely interpreted as the first sign that Go is lagging third and last in the dogfight between the budget carriers.
It is believed that Michael O’Leary, chief executive of Ryanair had privately vowed to spend whatever was necessary to fend off the challenge of Go, which he saw as a threat to his airline’s dominance in Ireland.
A source close to the company said yesterday that Ryanair, which flies four times a day from Edinburgh to Dublin had discarded its ultra-low cost model to offer services from the Scottish capital.
"Ryanair is paying exactly the same as Go to fly from Edinburgh. It has lost substantial sums of money on the route, and is prepared to continue to do so. But the strategy seems to be working," he said.
A spokeswoman for the Irish carrier denied the airline was running the service at a sizeable loss but added: "It is an important strategic move for us to fend off the Go challenge. They must be hurting more than us."
She added that Go’s partial withdrawal from the route would have far-reaching implications for the future expansion strategy of budget airlines.
Ryanair has carried more than 35,000 passengers on its Edinburgh to Dublin service since its launch in September and said yesterday that its aircraft on the route were more than 95 per cent full. The spokeswoman said 70 per cent of seats in November had already been sold.
Any hint that Go is losing out to its rivals will also be a blow to 3i, the venture capital firm which backed Barbara Cassani’s £110 million management buy-out of the company from its parent British Airways.
A spokesman for Go denied it was losing the battle against easyJet and Ryanair and said: "The airline had been forced to reduce capacity on its Scottish routes in order to boost the number of flights on its new Heathrow to Belfast route.
"Because BA pulled out of such a major route as London to Belfast we felt obliged to act. We have done so by increasing the frequency of flights on that route from four to six a day each way.
"BA’s action presented us with a major opportunity that we could not afford to miss. As our resources are limited we had no alternative but to look for capacity elsewhere."