Originally Posted by ryan2000
Unwise to go head to head with Ryanair on Cork Dublin since 2005.
It was Ryanair who went head to head with Aer Arann IIRC. Why wouldn't they try to protect their market share?
Originally Posted by Cyrano
Yes, but...
Leaving aside the Aer Lingus Regional routes the core of the RE network is made up of the PSO services, which is a niche on the verge of extinction. And while technically the share of their revenue made up of PSOs is relatively small, the other non-PSO routes benefit from economies of scale from the PSO operation. Assuming the PSOs go away next year (or earlier), I find it hard to see which of their non-EI-Regional routes could still be sustainable apart from WAT-LTN and maybe GWY-LTN and/or DUB-IOM.
I don't doubt there are routes that wouldn't be operating if not for the PSOs, and we saw this to be the case in 2008 when Aer Arann dropped the Kerry-Manchester route after losing the Kerry PSO. That said, we recently saw them restore the route, so clearly its not entirely dependent on the PSO to be profitable.
But, the majority of routes Aer Arann operate are not dependent on the PSO money to be profitable. Unlike what Michael O'Leary would have you believe, Aer Arann, like Ryanair, pay increased charges on their PSO routes, which offsets any profit they make from the PSO subsidies. And where regional airports have no PSO routes, i.e Waterford, they get much higher operational subsidies than the regional airports with PSO routes.