EZY/LGW v FR/STN

[FRatSTN]

I don't really like starting new threads, but in this case I had to because it could go in either of one of the EZY, FR, LGW or STN thread.

Anyway, here is my analysis of the following airline/airport relationships based on the recent events:

FR/STN
Ryanair has of course struck a deal with STN based on an agreement of lower costs and improved facilities. Ryanair is also looking at becoming more customer friendly to stay competitive with rivals like EZY.

What we could have in a few years time at FR/STN is more choice of flights and destinations, a better airport, a better airline and lower fares.

The combination of a potentially improved carrier now with lower operating costs at STN allows for a better product with a better range of services at lower fares! This should sufficiently increase passenger demand to cover the lost revenue per passenger by lowering fares, therefore we have potential to see substantially increased profitable growth for FR at STN in the coming years.

Ryanair agrees ?aggressive? 10-year growth deal with Stansted - www.travelweekly.co.uk (http://www.travelweekly.co.uk/articles/2013/09/16/45287/ryanair-agrees-aggressive-10-year-growth-deal-with.html)

EZY/LGW
EZY has grown aggressively at LGW and will continue to by inheriting Flybe's slots. After that they will probably start to stagnate unless other airlines start pulling out.

What we could have in a few years time is EZY finding it can't add any more to LGW and having to increase fares because LGW can now raise it's charges at the rate of RPI Inflation +0.5%.

The combination of a product where long term growth is limited and passengers are facing higher fares could start to be an issue unless EZY can think of a really good way to cut it's operating costs. This alongside the competition of potentially an improving carrier up the road that can and will significantly grow it's service offering whilst lowering fares really could put pressure on EZY/LGW in the coming years.

EasyJet boss slams Gatwick pricing proposals - www.travelweekly.co.uk (http://www.travelweekly.co.uk/Articles/2013/10/03/45506/easyjet-boss-slams-gatwick-pricing-proposals.html)

Ryanair has room to catch-up with Easyjet (http://www.4-traders.com/news/Ryanair-has-room-to-catch-up-with-Easyjet--17320180/)

Both airlines and airports will undoubtedly have a very bright future, but that is my analysis. I would be interested to know what anybody else thinks, but please use educated reasons (or any links if you can) to analyse any point of views. I'm a bit sick of certain people who just come forward and attack posts with arrogant responses with no analytical feedback, industry related knowledge or intelligent explanation what so ever!

[Skipness One Echo]

Provocative topic which may turn tribal so very quickly as airport and airline fanboys get stuck in. May I just caution against any "analysis" from anything resembling a press release. In my field of marketing analytics, we see most of the numbers in such data to be skewed intentionally to deliver whatever spin was decided in advance.

You're very framing of the question is selective and pro Ryanair. Yield per passenger is somewhat higher at Gatwick and EZY have a good relationship with GIP. The Ryanair product and experience is what it is, no amount of spin will make any economy experience all that good. Any savings on fees are seldom passed onto the consumer in the market place sadly, what they save on fares has to be made up elsewhere.

This is done through under paying third party ground handlers ensuring baggage is often late. Paying flight deck crew a pittance and using a large number of contract staff, ensuring poor treatment goes unchallenged.
Cutting airport fees means no money to invest in infrastructure, so nice facilities are allowed to fall into disrepair. This revenue stream is then partially made up by charging for trollies, drop off, plastic bags, queue jumping, checking in bags, printing a boarding card. Rationally one may save money, too many people are angered by the rip off meaning the overall total ends up being more than a legacy on occasion with none of the benefits.
We could go on to engineering apprenticeships and cabin crew training bringing benefits to wider skills and society but this is about to turn into one of those "my airport/airline is better than yours" threads I think.

Btw if that last dig was aimed at me, and I am sure it wasn't, I work as a marketing analyst deeply involved in customer behavior metrics, I also have several years working with air travel clients. Just to be clear, you understand.

[FRatSTN]

May I just caution against any "analysis" from anything resembling a press release.

Ok. My entire post in italics is a nut shell of my analysis. I could write on for pages but am sure many people would get bored. The links to press releases just help to back it up.

Also, I have no interest on turning this into a my airline/airport is better. I added that last bit of my post categorically so that sort of stuff wouldn't happen! Please understand!

EZY have a good relationship with GIP

That is the one that really gets me confused you know.

I don't really get your point? I thought that wouldn't count for anything? "it's a ruthless business where loyalty counts for nothing." and "loyalty is weakness" were your exact words a couple of weeks back on the Luton thread!

If/when Gatwick raises charges and EZY is forced to do the same in a highly competitive market or else those all important yields will fall (when FR's yields at STN are likely to rise), what's to stop that relationship weakening? Because you know... There's no loyalty. It's a ruthless business, EZY will look elsewhere?

Well let me say this...

FR have a good relationship with MAG. When that was last bought up this was your pretty shocking sarcastic response...

Ryanair now loves Stansted and it's for good this time. "MOL and MAG up a tree, K I S S I N G...."

You are not really presenting yourself as the professional marketing analyst you claim to be with remarks like that!

Why were you so eager to argue against that one but happy to cough straight up about how a healthy EZY/GIP relationship is not only present, but advantageous?

Please make your mind up. It doesn't look like it's me with the my airport/airlines is better attitude!

I raised a fair point based on the recent events in the industry, which people are welcome to comment on. However yet again, you failed to supply a reasonable and unbiased argument. Thanks for your input but frankly you wasted your time.

[Skipness One Echo]

Forgive me I shall clarify, the cost of using LGW under the current charging regime is helpful to EZY as it has driven out flybe from some key domestic markets and allowed EZY to continue growing at LGW making the base their largest by far. EZY may look elsewhere but given neither LTN or STN could make dent in replacing 50+ based aircraft in the London area. Hence, GIP/EZY have an interest in a stable relationship. Not all client relationships are brutal, some do break down though. See LHR/BA and FR/STN to see how not to do it. Also see FR vs Spanish Airports as well, and actually Portugal, and Budapest etc. most relationships have an edge but don't descend into playground name calling in the press.

Please do not write on for pages. We had a chap recently called British Airways who did that. It got wierd.....

The difference between EZY/GIP an FR/everyone is that your employer conducts negotiations in their unusually aggresive and threatening manner against what is often a much weaker party. Unusually MAN held out and FR were the ones who caved, which was an interesting first. I may be wasting my time making my point to you, but there may be a wider audience who may listen.

Forgive the tone of my "mol up a tree" remark, it was a dig against those who saw an adversarial business relationship in terms of a long term love affair. It is not a case of making my mind up, some relationships are professional involving tough bargaining, some are just.....not, let's say unprofessional. If you think I am arrogant, how do you rate your leader, Ducksy, er Michael O'Leary?

[compton3bravo]

Just my 2 Euros worth - personally I cannot see many residents of Kent, Sussex, Surrey, Hampshire wishing to travel to Stansted just because fares are a little lower. Affluent area etc I think they would be prepared to pay a little bit more to use Gatwick and with transport costs as they are in the UK it would probably end up cheaper unless there is TINA (there is not alternative) regarding a specific route.
Similarly north of the Thames although I think many more people are willing and do travel south to Gatwick because there is a much better rail network (Thameslink) and of course better choice of routes.

[Capetonian]

And here's mine : Even if I were willing to travel on Ryanair (and I'm not) I would happily pay more not to travel from Stansted in particular, or Luton. If I one of those airports suited my geographical needs, I might have a different view, but my last experiences there were so bad I have no wish to use either airport again, even when it might be convenient.

It's time Ryanair and its supporters realise that 'cheap' is not the only criterion which influences purchasing.

[EssexMan61]

I have to say FRatSTN - it is amazing that you actually got through a whole post without criticizing SEN. Well done!!!!

I am shortly off outbound through SEN and - unavoidably - back through the cavern that is STN. Will post my findings - but all do have a look at "SKYTRAX" that reports (purely passenger) views on all the "London" Airports - of which STN, SEN, and LTN all have similar journey times once plane to train times are factored in.

[FRatSTN]

In my 560 posts until now, I think I have probably mentioned SEN in about 2 or 3% of them at the very most.:=