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-   -   STANSTED - 2 (https://www.pprune.org/airlines-airports-routes/245928-stansted-2-a.html)

gilesdavies 17th Sep 2013 12:46


Unsurprisingly, however, Ryanair pax rank among the lowest in the industry for airport spend therefore itís hard to see how MAG are going to make a return on this arrangement.
I think another reason for this is Ryanair strictly enforces a one bag boarding policy...

easyJet and Monarch for example do not seem to take issue with you having a small separate bag with Duty Free or things you have purchased in the airport.

With Ryanair, you must put it all in your single bag!

I remember being at Malta Airport two or three years ago, and someone was forced to leave their duty free behind, as they had no room in their bag to put it... A member of cabin crew was helping process the boarding at the gate, and showed no flexibility and would not allow anyone else to carry the bag for them. Maybe it is more relaxed now?

Skipness One Echo 17th Sep 2013 13:20


All that happens is that those airlines then just pass the higher costs onto the passenger! In my opinion that's an awful way to do business!
Um, that's how business works. The reason Ryanair hacks so many people off is that instead of one "high" price, you get a "cheap" headline airfare and the difference between the two is made up in discretionary payments that are really essential. It's a false saving for most people.

No Thanks! Just get a Meal Deal from Smith's in Stansted Departures.
The level of your business acumen is clear if you think WHS in Departures is good value. In all seriousness, and I do mean to be direct here, they're one of the most complained about rip off merchants, Retail price of snacks and drinks at airports is at a substantial mark up versus high street trading. I feel robbed everytime I use them. Are you back working for FR btw? Thought you were with EZY now?

Or maybe MAG are just making the cost savings that BAA could have done years ago?
Any idiot can make "cost savings", cut charges and let Ryanair grow massively. However they're supposed to be making money as an airport business, the medium term prospects for enhanced profitability seem elusive to me. We shall see.

FRatSTN 17th Sep 2013 17:50

Skipness One Echo

You have completely missed the point!


Um, that's how business works.


No it isn't! Not all businesses out there hack off customers through high charges to make hefty profits. Often in the most successful and most sustainable cases, we see businesses offering discounts and cost incentives to entice growth and make profit through the extra customers bought in by that (which is what MAG is doing at Stansted with Ryanair).

As I've said, it's not ideal for Ryanair to become increasingly dominant, but what else do you expect MAG to do? They are never going to increase profits by raising costs because airlines would be pulling more flights out, and other airlines just simply will not/cannot deliver the level of growth that Ryanair can at this stage.


The level of your business acumen is clear if you think WHS in Departures is good value.


Never did I say Smiths is good value, far from it. There's no need to go on about it being rip-off compared to high street branches, I think we all know how much we are ripped off inairports! The point is that it can still be cheaper than buying on Ryanair and why there is an incentive for people to buy in the airport. There's little business knowledge needed to see that, more a case of common sense.


Any idiot can make "cost savings", cut charges and let Ryanair grow massively.


Anybody except BAA of course, because they have that exact attitude of passing stupidly high costs onto airlines to make profit that you seem to see as the norm. It's that management that lead to why Stansted fell apart under their ownership. It couldn't be clearer to see that their management became a complete failure. That was no way to carry on!

But you know what? I don't really care about all the negativity and speculation of profits falling in light of this news. If that was ever an issue MAG would not have agreed this deal with them, it's that simple!!! I think it's a complete win-win situation for Ryanair, MAG and the 1.3 million extra passengers in 2014. I just hope that the sooner some people can brighten up and see that, the better!

lexoncd 17th Sep 2013 22:01

For those that missed it part of the Ryanair MAG deal over stansted is that the one bag rule will be relaxed to encourage more spend at the airport.

LGS6753 18th Sep 2013 10:09

The old business adage "Turnover is vanity, profit is sanity but cash is king" seems to apply here. MAG are chasing turnover, hoping that profits will accrue from higher revenue, once the high fixed costs of an airport operation are covered.

What they are doing is engaging in that most dangerous manoeuvre, marginal cost pricing. And they appear to have forgotten the basic rules of supply and demand.

Although Stansted is the least attractive of the London area airports due to its location, it is still a London airport, and slots at any London airport will become scarcer - and thus more valuable - as the economy picks up. They have offered Ryanair a deal that gives them lower costs with increasing throughput (ie the scarcer the resource, the cheaper it gets!).

They are so desperate for short-term income to service their massive borrowings that they are engaging in desperate measures. The FR deal, and the EZY one a few weeks ago, demonstrate the fear in the MAG boardroom that as a result of overpaying for STN they will soon have to face up to the taxpayers of the Manchester area who own their business, and are set to get less out of it than when they were just running their local, successful, airport at Ringway.

Cyrano 18th Sep 2013 10:41


Originally Posted by Skipness One Echo (Post 8051947)
It's not religious, believing in your airport like a football team, it's a business.

Oh, I don't know, I see a niche ancillary revenue opportunity for airports here: sales of supporter scarves, woolly hats etc: "Stansted United", "Luton Airport 4ever", "Size isn't everything - LCY", etc.

They could advertise on PPRuNe and really nail the demographic. ;)

Buster the Bear 18th Sep 2013 10:50

CAA defers regulation ruling on Stansted following Ryanair expansion deal - www.travelweekly.co.uk

JonEMA 18th Sep 2013 12:00

Spot on LGS......

The cynic in me wonders if this wasn't a plot hatched in Dublin a few years back...

All a bit too cozy I reckon....

racedo 18th Sep 2013 12:17


The old business adage "Turnover is vanity, profit is sanity but cash is king" seems to apply here. MAG are chasing turnover, hoping that profits will accrue from higher revenue, once the high fixed costs of an airport operation are covered.

What they are doing is engaging in that most dangerous manoeuvre, marginal cost pricing. And they appear to have forgotten the basic rules of supply and demand.

Although Stansted is the least attractive of the London area airports due to its location, it is still a London airport, and slots at any London airport will become scarcer - and thus more valuable - as the economy picks up. They have offered Ryanair a deal that gives them lower costs with increasing throughput (ie the scarcer the resource, the cheaper it gets!).

They are so desperate for short-term income to service their massive borrowings that they are engaging in desperate measures. The FR deal, and the EZY one a few weeks ago, demonstrate the fear in the MAG boardroom that as a result of overpaying for STN they will soon have to face up to the taxpayers of the Manchester area who own their business, and are set to get less out of it than when they were just running their local, successful, airport at Ringway.
Think you need to take the blinders off.....

Success for most businesses is a combination of gaining new customers and expanding what you are selling to the existing ones.

There is pretty much little cost to Stansted in gaining an extra 50,000 passengers a week. Security still has to be paid for whether its 300,000 or 350,000 pax a week going through airport as has everything else. You may need some additional headcount here and there but very little...................no new car parks, no new trains, no new facilities.

Incentivising existing businesses to grow is easier and cheaper than investing vast sums in acquiring new customers who can never give you the same volume in a short timescale. You need new but existing do not have to invest in setting up a new operation and market their services as they already doing that anyway and existing less likely to take all business away at a stroke of pen.

The idea that signing a 10 year agreement is somewhat short term is laughable, frankly most service providers would snap the arm of a customer who agreed a 10 year deal because that in itself is bankable revenue.

As MAG have highlighted a clear strategy in investing in the airport, building passenger numbers and getting existing operators to sign long term contracts then I wonder what you would percieve as good management ?

In 6 months they have thrown out the old strategy and made progress lacking for so many years.

Same agruements were used when Gatwick was bought but amazingly now when you go to the airport it looks like it wishes to welcome people in, not drive them down a dingy corridor with an entrance unworthy of a train station.

BAALHR held back airports for years because it was LHR or nothing, thankfully that has ended.

FRatSTN 18th Sep 2013 13:28

racedo

You are spot on! Unfortunately some people can never be satisfied, but we'll see how things change for the better in the years to come.

Thank goodness somebody can see round the logic of MAG's strategy, and thank you for explaining it perhaps more specifically than I did.

If anybody is interested to find out a little more about the £80m redevelopment, then please have a look through this link. It includes what MAG are going to be doing with a timeline of events up to early 2016:

http://www.stanstedairport.com/media...-v2-210813.pdf

To me this looks great, very evolved around passenger experience rather than just increasing capacity. This only shows how MAG's strategy clearly differs to the failing BAA one!

davidjohnson6 18th Sep 2013 13:50

While racedo has a point about the costs of running an airport being significantly weighted towards fixed rather than scaling per passenger and Stansted having the infrastructure in place to support plenty more passengers, I'm in some doubt as to whether a 10-year deal is perhaps *too* long term.

London is most unlikely to have an additional runway for another 10 years. While the economy has its good and bad years, if we assume an *average* growth in demand for air travel between now and 2023, at what point does demand for London airport capacity start to overtake supply ? Yes, I know that when runway capacity gets tight, airlines do things like upsizing aircraft from an A319 to an A321, and airports enlarge terminal capacity.

If it'll take a full 10 years for spare capacity to be used up, then MAG have likely done the right thing. If it'll take 5 years for current demand to mop up spare capacity and there are no break clauses in the contract allowing STN to raise their airport charges, then the deal is more in the airlines' favour.

hammerb32 18th Sep 2013 14:15

The length of the deal could indeed be construed as long but in reality if MAG feel the deal is profitable then you cannot fault the logic on signing the deal as long as they can.

PPE 20th Sep 2013 19:44

Runway closed
 
Stansted runway was closed earlier due to police incident! I believe it is now open however an aircraft is on the Hijack stand with lots of blue and twos!

STN Ramp Rat 20th Sep 2013 20:30

a Srilankan A330 I believe

LTNman 20th Sep 2013 20:38


Although Stansted is the least attractive of the London area airports due to its location, it is still a London airport
I would say that title actually goes to Southend-on-sea airport, but then some people would argue that Southend is not actually a London airport. Not sure I would support that argument but it might as well be on the moon if you need to get there by public transport for an early flight.

tws123 20th Sep 2013 21:34

Although some may say its the most attractive according to the Which? survey.

mikkie4 25th Sep 2013 20:09

A320 at SEN
 
Will an A320 be transfered from stansted to southend to do the TFS flights? or will it come from luton?

Tranceaddict 26th Sep 2013 16:30


Will an A320 be transfered from stansted to southend to do the TFS flights? or will it come from luton?
Only one A320 based at STN, and that's busy every day, so doubt it will come there.

FRatSTN 26th Sep 2013 23:19

Aegean Airlines
 
Aegean will be back at Stansted again for a brief period over the Christmas hols. For that time they will serve Heathrow, Gatwick and Stansted in London.

FRatSTN 27th Sep 2013 12:01

Quite an interesting report from CAPA about the Ryanair deal at Stansted.

Ryanair?s new growth deal with London Stansted Airport: mutual love-in? | CAPA - Centre for Aviation

Still some big questions to be answered, but the most interesting point for all those worried about how MAG are going to make profit is this:

"While lower fees will dilute Stanstedís aeronautical yield per passenger, the price elasticity of demand for air travel will stimulate passenger numbers as Ryanair will also lower its fares. In addition, Stansted will continue to receive the benefit of retail sales and its net retail income per passenger will be unaffected. This should mean that a cut in airport fees should lead to rising passenger numbers and increased revenues for Stansted. In a largely fixed cost business, and particularly one where incremental passenger handling costs are very low, this should drive higher profits for Stansted."


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