Originally Posted by Cyrano
Sorry, but this is not the case. If the increased charges offset any profit, then what's the point of an airline bidding for a PSO?
You're right that there are increased charges - the PSOs are in large part the delivery mechanism for state funding to regional airports. But the airline bidding for the PSO is allowed and expected to show a modest profit level over and above the operating costs (and remember, the state is the one who's paying.)
You know well what I meant. If an airline bids €10m for a PSO contract and gets it, its not making €10m. It'll make a small profit from that, but a lot of that money is as you say the delivery mechanism for state funding to the regional airports by way of increased airport charges.
Originally Posted by Cyrano
Furthermore, if (hypothetically) an airline has a PSO contract for 3 round trips per day from Galway to Dublin and takes (perfectly logical) advantage of that to schedule a 4th round trip at a peak time using the same aircraft and crew (operating at non-PSO charge levels), it certainly is benefitting from the base of the PSO.
I never said some routes weren't reliant on the PSO routes to operate, and I even highlighted an example of where this was the case...
I'm just making the point that most routes
aren't reliant on the PSO routes as base to not only operate, but also be profitable.
Originally Posted by Cyrano
Or if it doesn't do a 4th Galway-Dublin but instead a Galway-Manchester or Galway-Edinburgh or something else, on a marginal basis because the full costs of aircraft and crew have already been borne by the PSO contract, are you really telling me that the airline gains no advantage from the PSO?
No I never said that actually if you read my reply...