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Old 24th Dec 2009, 09:25
  #702 (permalink)  
GELOFAB
 
Join Date: Aug 2007
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You are criticising others for being fearful of FR competition, and you're exhorting carriers to be bolder. With respect, I think you are being unrealistic if you think that lower landing fees in SNN will somehow keep FR out.

Let's imagine that SNN says to easyJet (or Jet2, or whoever you like), "hey, come and fly routes from SNN, and we'll only charge you €0.50 per passenger, and we promise that we'll not do any discount deals with Ryanair." Do you imagine that Ryanair will therefore conclude "oh, damn, we lost that one, never mind", and walk away? FR is currently operating DUB-ORK with poor load factors and yields, which they launched in competition with Aer Arann (and therefore are unlikely to have a discount deal) - but they keep operating it to keep the pressure on RE. The history of easyJet's (and before them Go's) failed incursions into Ireland demonstrate FR's aggressive response to competition, with or without discounted airport deals. While I deplore FR's hyper-aggressive approach to competition, it does not surprise me: if you had that many new aircraft arriving that you had to fill, you too would be willing to take some short-term financial sacrifices in order to keep markets to yourself in the longer term.

You're suggesting that other carriers should be brave and should start routes out of SNN, effectively calling Ryanair's bluff. Frankly, if I were a shareholder in the likes of easyJet or Jet2, I would regard this as suicidal folly - certainly not a wise use of cash. Faced with a choice of new route startups, one which carries a risk of a war with Ryanair and another which doesn't, which makes more sense? Especially since - with all due respect - the potential return from the SNN market is not so lucrative as to justify the risks.

You may deplore this timidity in the face of Ryanair and wish it were otherwise. I can entirely understand that. But it is a perfectly rational timidity. One of the most frequent omissions in startup-company business plans is real consideration of what the competition will do - the assumption is "we're small, so they won't do anything." This is not a safe assumption, even less so when the competitor in question has established its reputation for squashing competition. Please feel free to disagree, go out and raise money for a startup, and fly from SNN. I am not being funny, I'm being sincere. If you feel there's a real business opportunity, go and do it - others' timidity may be your opportunity.
Cyrano:
a) With all due respect. I don 't care if I am unrealistic. I do know what would happen if everybody adopts the "there is nothing that can be done" attitude or the "perfectly rational timidity" attitude. It will happen that business is gone, as it has happened in other airports. To this we only have two options .Either we can go to the pub for a pint and to lick our wounds with perfectly rational timidity or we can try to think in alternatives. Even unrealistic alternatives are valid to me even if they only serve to the purpose of setting up the limits
b)It is not my job to raise money and start up a company business. However, is the job, and the duty, of the guys and gals in the SAA to loook for other options beyond FR.
c) what SAA could try, in my opinion, is not only what you mention about charges, that as well, but a commitment to say to other FR direct competitors: Here is the deal: not only am I offering you x amount of charge per passenger but I am telling you if you come and do business with me, SAA, I will charge Ryanair double amount in fees per passenger than the amount I am charging you for x amount of time. This is only an example of what could be done. I honestly do not see what is the problem in picking up the phone and making this kind of unrealistic offers to FR competitors and their shareholders.
And the point behind this idea is, precise, what you have mentioned about FR competitors.They have failed to enter the market because FR fought better.Well, is time to kick FR out of the market and give entry to new players and new rules. What you say about FR and Aer Arann in Cork is precisely why this has to be fought back. If SAA has an oportunity to survive is by fighting back FR, not by melting down with "perfectly rational timidity". What is sure, because we have seen it throughout Europe, is that if you play FR game you are going to suffer the consequences, one way or the other. Besides, what is FR going to retaliate back with? withdrawing their planes?
Whas is there left for Shannon airport to lose?

Good reply, Cyrano. It's so easy to have the courageous tongue (or pen) with no need to bear any financial consequences. Have the money - invest them, hopefully you'll make some more, at least you can believe it happens.
it is definitely easier to tell to each other there is nothing can be done so let's go to the pub for a pint or two and to watch soccer.That I can do too.
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