Originally Posted by TwinAisle
Why do you think offering a product at a price people want to pay, and at a price where you can make a profit without a public subsidy, is a distortion of the market?
Badly phrased on my part - the LoCos distort the general public's
price perception. That, I believe, is beginning to change (thank Fascinating Aida!) but there remains the problem that some "marginal" airports - especially in France - have prostitued themselves to the likes of Ryanair and their 190-seat aircraft (frequently yielding to the pressure to contribute to a dubious "marketing" fund) to the extent that it becomes difficult to convince people that 9€98 is not a realistic price for a 500nm journey.
This creates a problem when a small operator tries to run an alternative service at "normal" rates, often receiving a double-whammy because the airport doesn't think the 30- or 50-seater proposition is worthy of a similar "marketing" incentive. At "normal" rates, business customers make the cost-benefit calculation and it works, but only as long as business justifies it.
However, there is light in the tunnel here in France. The local authorities that run many of the marginal airports have come under increasing pressure to cut their subsidies, with the effect that there is a pattern emerging of primarily RA/EZ/Flybe/bmi airports on the one hand with typically high parking charges, hot, overcrowded terminals (even with on-time flights) and destinations only in the UK or Ireland; and on the other, smaller facilities with no major carrier but a better range of European or French destinations from smaller operators.