Manchester-2
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Thank you Ozzy. I was rather drawing on my experience in banking. It is the norm there to routinely ask clients of competitors for their business and there are no barriers to customers moving from one bank to another. In the name of competition however, RBS has been instructed to reduce its market share of business accounts and customers are actively encouraged - and incentivised - to move elsewhere.
The pool of business customers in the UK is vast and the risk to any one bank of losing a few customers is small.
However, airlines are certainly moving in the direction forecast by MOL a couple of years ago and are consolidating to a small core which between them will hold great market power. When I posed my earlier question about regulation, I should have indicated that my interest was around the potential for the market to be distorted by both a small number of airlines and a small number of airports. Given the high number of recent failures, perhaps a reduction in choice is inevitable.....as long as it isn’t on the back of retrenchment to the Big Smoke as alluded to above.
The pool of business customers in the UK is vast and the risk to any one bank of losing a few customers is small.
However, airlines are certainly moving in the direction forecast by MOL a couple of years ago and are consolidating to a small core which between them will hold great market power. When I posed my earlier question about regulation, I should have indicated that my interest was around the potential for the market to be distorted by both a small number of airlines and a small number of airports. Given the high number of recent failures, perhaps a reduction in choice is inevitable.....as long as it isn’t on the back of retrenchment to the Big Smoke as alluded to above.
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This really comes down to whether you want to live in a free-market economy or a command economy. In a free-market economy, businesses are free to compete with each other for customers. In a command economy, state officials dictate outcomes. I'm a free-market advocate myself, though I note the arguments in favour of both systems. Our airports are generally free to compete with each other for business, and this process has generally produced good outcomes for the travelling public. Liverpool has done well in competing for the attentions of Ryanair, EasyJet, Wizz and Blue Air. They also won a promise of business from Adria Airways over the Manchester option ... though that carrier failed before anything came of it. No complaints from MAN about "unfair competition" in any of these instances, though when it is MAN which looks to have the upper hand, cries of 'foul' come flying out of Merseyside. No, the free market works both ways. None of the parties should have their hands tied in bidding for business.
And indeed, this process is not just about the winners. Ryanair has done well out of playing off MAN / LPL / LBA against each other. EasyJet has played off MAN and LPL. And, as cited upthread, Wizz has form for flirting with an unserved airport to secure better terms at their preferred base of choice. Could this be happening again? We don't know, but it remains a possibility. If they end up choosing to expand at LPL / DSA, MAN will have to accept that: it is a competitive free market outcome. But the reverse is also true.
Whatever your ambitions for your preferred local airport may be, it is a fact that this process of competing for business results in lower fares for consumers. And that is what the competition authorities like to see. MAN is doing nothing wrong in competing for business with neighbouring airports. And, conversely, neither are they in bidding against MAN.
And as for the airlines: they've never needed improved terms from suppliers more than they do now.
And indeed, this process is not just about the winners. Ryanair has done well out of playing off MAN / LPL / LBA against each other. EasyJet has played off MAN and LPL. And, as cited upthread, Wizz has form for flirting with an unserved airport to secure better terms at their preferred base of choice. Could this be happening again? We don't know, but it remains a possibility. If they end up choosing to expand at LPL / DSA, MAN will have to accept that: it is a competitive free market outcome. But the reverse is also true.
Whatever your ambitions for your preferred local airport may be, it is a fact that this process of competing for business results in lower fares for consumers. And that is what the competition authorities like to see. MAN is doing nothing wrong in competing for business with neighbouring airports. And, conversely, neither are they in bidding against MAN.
And as for the airlines: they've never needed improved terms from suppliers more than they do now.
If Manchesters financial dominance allows them to offer much lower rates than Liverpool and indeed any other northern airport, I'm not sure how this can be considered a benefit to the region as a whole or passenger.
We are basically left with less choice and a growing monopoly at one airport not to mention job losses. I don't accept the lower fares argument , weather you fly from Liverpool or Manchester or Leeds they are all competing and would have to therefore offer attractive fares otherwise many passengers would just use Manchester if the fare from there was so much less.
If Liverpool looses its main carriers to Manchester due to anti-competitive pricing, I fear for Liverpool Airports future, which I believe to be highly detrimental for the travelling public and the loss of a northwest asset.
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VC10...if you were a boss at EZY looking to make considerable savings, in light of the current situation, would you say it is sensible to have bases 30 miles apart, with the duplications of costs that creates, to essentially serve the same catchment area ?
As for you point on competition...multiple airports serving a route has an effect obviously, but so does multiple airlines serving the same route from just one airport - which is what we will see at MAN with LS, EZY, RYR and maybe Wizz UK. If in worst case scenario the all switch to MAN (highly unlikely) then we wouldn't see mass price rises. Worst I can see from a pax point of view is a few may have to travel a smidgen further. The bleak side is the effect on LPL, but as many have said above this type of thing was always going to happen, and already is...just look at what LGW has lost for one example.
As for you point on competition...multiple airports serving a route has an effect obviously, but so does multiple airlines serving the same route from just one airport - which is what we will see at MAN with LS, EZY, RYR and maybe Wizz UK. If in worst case scenario the all switch to MAN (highly unlikely) then we wouldn't see mass price rises. Worst I can see from a pax point of view is a few may have to travel a smidgen further. The bleak side is the effect on LPL, but as many have said above this type of thing was always going to happen, and already is...just look at what LGW has lost for one example.
Last edited by eggc; 23rd Nov 2020 at 09:56.
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Consolidation at one base would appear to be nailed on.
it's a new world compared to 12 months ago.
EZY will be obligated to make best choices for its shareholders, 2 bases 30 miles apart is a nonsense in this climate when airlines are fighting for survival.
It might be unpalatable but going bust is worse !!!
it's a new world compared to 12 months ago.
EZY will be obligated to make best choices for its shareholders, 2 bases 30 miles apart is a nonsense in this climate when airlines are fighting for survival.
It might be unpalatable but going bust is worse !!!
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Staff in all posts except flight / cabin crew. Probably some offices etc aswell. I'd say that today every penny counts to every airline - all will be looking for savings wherever possible.
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VC10...if you were a boss at EZY looking to make considerable savings, in light of the current situation, would you say it is sensible to have bases 30 miles apart, with the duplications of costs that creates, to essentially serve the same catchment area ?
As for you point on competition...multiple airports serving a route has an effect obviously, but so does multiple airlines serving the same route from just one airport - which is what we will see at MAN with LS, EZY, RYR and maybe Wizz UK. If in worst case scenario the all switch to MAN (highly unlikely) then we wouldn't see mass price rises. Worst I can see from a pax point of view is a few may have to travel a smidgen further. The bleak side is the effect on LPL, but as many have said above this type of thing was always going to happen, and already is...just look at what LGW has lost for one example.
As for you point on competition...multiple airports serving a route has an effect obviously, but so does multiple airlines serving the same route from just one airport - which is what we will see at MAN with LS, EZY, RYR and maybe Wizz UK. If in worst case scenario the all switch to MAN (highly unlikely) then we wouldn't see mass price rises. Worst I can see from a pax point of view is a few may have to travel a smidgen further. The bleak side is the effect on LPL, but as many have said above this type of thing was always going to happen, and already is...just look at what LGW has lost for one example.
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It is slightly more than a smidgen, if I leave my office at Seaforth to get to Manchester Airport for a flight after work, I will need to allow two hours to do that to allow for possible hold ups, plus check in. As far as I'm concerned it bad news for Liverpool Airport and the 5M who chose to use it and Liverpool City Region in particular and the NW in general. With respect to considerable cost savings, this can only be from very low fees to squeeze Liverpool out.
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Don't think anybody on here is urging that PDXCWL45, just asking the question if you were EZY would you think the overlapping bases could be more cost effective. I have little doubt from an EZY point of view consolidation would be the cheaper option.
Staff in all posts except flight / cabin crew. Probably some offices etc aswell. I'd say that today every penny counts to every airline - all will be looking for savings wherever possible.
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in particular in bound tourism which once we get out of Covid is significant, having no air services to Liverpool would have a massive effect on this.
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MAN is 30 miles away, which is hardly putting the Merseyside / North Wales ares out of reach. Economic issues (job losses etc) are valid comments, MAN being too far for tourists to get to aforementioned areas isn't really.
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Not so, city break visitors are not looking to add extra travel time to Liverpool city centre, the 30 miles away sounds close , but it doesn't translate in travel time. Anyway maybe it wont happen as you said.
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Also people looking for city breaks might not necessarily know the airports are close together. They might Google city breaks for Liverpool see not many flight options and look at other destinations.
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If "they" wanted to consolidate at Manchester- there is always the compromise of operating W pattern flights from MAN or overseas based aircraft into Liverpool.
On the subject of discounts to easyJet & Ryanair I'm sure Jet 2 & TUI would have something to say about that. I doubt it would be feasible to maintain an airport the size of Manchester without income from landing fees. There is a limit of how much you can rip people off with drop off charges and how much Duty Free you can flog, often at a higher price than regular discount shops.
On the subject of discounts to easyJet & Ryanair I'm sure Jet 2 & TUI would have something to say about that. I doubt it would be feasible to maintain an airport the size of Manchester without income from landing fees. There is a limit of how much you can rip people off with drop off charges and how much Duty Free you can flog, often at a higher price than regular discount shops.
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Whilst I suspect this pandemic has a way to run yet, EZY took a position fairly early on with long term cost efficiencies by closing bases as STN, SEN and NCL. It would appear they have looked at the near term future as best as anyone can and put measures in place to reduce overheads - they are currently anticipating operating at around 20% normal traffic levels over winter.
Any "sweeteners" from airports may see the traffic return quicker in those places next spring but I get the impression EZY are battening down the hatches now whilst planning for the longer term in the remaining bases. It is always possible that the situation could take a turn for the worse over the winter and they would then need to revisit the base situation again but for now, I personally don't think this will happen.
Any "sweeteners" from airports may see the traffic return quicker in those places next spring but I get the impression EZY are battening down the hatches now whilst planning for the longer term in the remaining bases. It is always possible that the situation could take a turn for the worse over the winter and they would then need to revisit the base situation again but for now, I personally don't think this will happen.
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Liverpool Airport were bases for Easyjet and Ryanair prior to them arriving at Manchester so those airlines were not attracted away from Manchester indeed neither have expanded greatly at Liverpool since that happened. I very much doubt Liverpool Airports management ever expected Adria to begin their proposed operations considering their financial situation, of course we are not privy to negotiations but I cant really imagine why Liverpool Airport would go after an airline in such dire shape. Wizz and Blue have only ever operated from Liverpool and of course they will have to offer them attractive rates but there will be a limit to what an airport the size of Liverpool can offer compared to its much large neighbour same for LBA which as far as I know also hasn't attracted any business from Manchester airline wise, with Jet2 growing very slowly if at all there.
If Manchesters financial dominance allows them to offer much lower rates than Liverpool and indeed any other northern airport, I'm not sure how this can be considered a benefit to the region as a whole or passenger.
We are basically left with less choice and a growing monopoly at one airport not to mention job losses. I don't accept the lower fares argument , weather you fly from Liverpool or Manchester or Leeds they are all competing and would have to therefore offer attractive fares otherwise many passengers would just use Manchester if the fare from there was so much less.
If Liverpool looses its main carriers to Manchester due to anti-competitive pricing, I fear for Liverpool Airports future, which I believe to be highly detrimental for the travelling public and the loss of a northwest asset.
If Manchesters financial dominance allows them to offer much lower rates than Liverpool and indeed any other northern airport, I'm not sure how this can be considered a benefit to the region as a whole or passenger.
We are basically left with less choice and a growing monopoly at one airport not to mention job losses. I don't accept the lower fares argument , weather you fly from Liverpool or Manchester or Leeds they are all competing and would have to therefore offer attractive fares otherwise many passengers would just use Manchester if the fare from there was so much less.
If Liverpool looses its main carriers to Manchester due to anti-competitive pricing, I fear for Liverpool Airports future, which I believe to be highly detrimental for the travelling public and the loss of a northwest asset.
You may recall that afew years ago Ryanair abruptly pulled all its schedules ex-MAN with the exception of the Dublin service in a dispute over "rip-off fees". So MAN certainly wasn't using any "anti-competitive pricing" powers to gain advantage over the thriving LPL base at that point. And Ryanair's return to MAN post-dispute came with higher charges attached ... I don't know what the LPL fees were but it does seem that Ryanair was paying more to use MAN. So again, the evidence suggests that MAN has not used its size to undercut LPL on price in the past. On the contrary, it has leveraged its attractive business proposition to charge more than smaller airports do.
The situation vis-a-vis LBA is different again. The reason that Jet2 stopped growing much there was that they had effectively bulked out the airport in terms of overnight aircraft parking capacity. Pre-COVID, LBA was operating pretty much to the capacity its fixed infrastructure could tolerate, so no adverse effects from neighbouring airports inhibiting the action there. We don't know how the market will respond post-C19, but beyond it's 2019 throughput, LBA growth is primarily dependent on increasing terminal and aircraft parking capacity on site. Certainly, MAN was not eating their lunch back then. Note too that LBA actually DID attract a Ryanair base AFTER that carrier was an established based operator at MAN.
Your assertion of MAN operating on a monopolistic basis doesn't stand up to scrutiny. Pre-COVID, LPL was scoring around five million pax per annum which is pretty healthy going. LBA, as mentioned, was restrained by the limitations of their infrastructure but operating broadly to capacity. DSA was doing fine, and has offset the recent loss of it's FlyBe operation with a two-ship Wizz base (alongside their existing TUI business). That would put them on course for record passenger throughput once C-19 is behind us. EMA is most notably a cargo hub, though it does have a healthy sideline in passenger airline business which appeared to be ticking along nicely pre-virus. Meanwhile, as mentioned earlier, BHX can point to its fair share of wins in the perennial battle for business with MAN.
So there is no evidence of any genuine issue with the existing system of airports competitively pitching for airline business. All local airports can boast their share of successes. MAN has never run away with 100% of the pie, and I don't anticipate anything close to that transpiring, notwithstanding that first-level airports tend to be the focus of consolidation in an immediate post-recession market environment. We may see an element of that playing out, but it does not constitute anti-competitive behaviour by the beneficiary airport. MAN is not state-backed ... it needs to make money, and all it's business pitches must allow for a worthwhile return to the bottom line, no matter how bids are structured. They've got an expensive new terminal extension to pay off.
The recent round of alarmism from some LPL advocates is without merit. The current system of airports competing for business from a range of carriers is working just fine. And the ultimate winners from this process are the fare-paying passengers.
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It won’t go down well with my friends further down the Mersey, but I would suggest that the renaissance that came when EZY and RYR took off there was actually because of Manchester. It’s well known that Manchester management at the time were pretty dismissive of the low cost carriers, preferring to court full service airlines. If they hadn’t done that, and had encouraged EZY and RYR as they do now, then it’s not unrealistic to suggest that both airlines would have come to MAN and not served Liverpool, which would have made things extremely difficult or even fatal for them.
