Aviation heading for broke

Here’s a thought – Ryanair and Easyjet might be the only surviving major British operators if this no-fly situation continues [I know Ryanair is Irish, but they operate a lot of flights from the UK]. Surely, if we get a repeat of what happened the last time this volcano got cross when it blew its top on and off for a couple of years, the likes of BA and other conventional airlines will simply not be able to survive.

BA was already losing a fortune before flights were halted, and given the huge size of its fixed assets, it would not be able to survive a major disruption to its summer schedules. The implications of what is happening have been little discussed in the media, which is obsessed with the colour of Nick Clegg’s tie collection, but they are serious and far-reaching.

Will anyone offer me odds against the government intervening to bail out BA? Watch this space.

  • The nightmare situation for the aviation industry is intermittent closure of air space. This dust cloud will blow over in the next day or two, but if it returns at the end of next week and everything is grounded again for a couple of days and the same happens on May 6th and May 20th and so on then people will give up. The whole advanced purchase model for Ryanair will turn into a lottery in reverse, you buy a cheap ticket and hope not lose a large some of money while you’re stranded in Venice or Granada.

  • Bill Fraser

    Any intervention by the UK government would need to be cleared by Brussels so you can bet other European legacy carriers would scream blue murder.
    More to the point shirt-term is the action of Eurostar in gouging passengers – reports today of average Paris-London fare £233

  • RapidAssistant

    My take on this is that the notion that a nation needs a flag carrying airline as a statement of its identity is outdated – that’s the card that Willie Walsh has played in BA’s newspaper ads through the strike that we “should keep the flag flying”.

    The whole problem with the legacy flag carrying airlines is that they’ve inherited old working practices, old union agreements and high cost bases from the days when flying was the preserve of the elite. BA has tried to weather that storm by focusing on long haul, business class flying – but that too is under threat by the advances in communication technology that has meant that people simply don’t need to travel the globe as much for global businesses to function.

    BA may try and play the card of comparing this situation with that of the big US carriers in the wake of 9/11 – but there is a fundamental difference – the Big Four (American, United, Delta and Continental) all form part of a vital domestic transportation system without which the USA’s economy simply wouldn’t function – and hence they are all heavily protected by federal government in Washington.

    That is not the case in the United Kingdom – we can live quite happily without BA. Put it this way – only 50% of the population ever gets on an aeroplane, and for those of us that do, we have plenty of choice of domestic carriers in the form of BMI, Ryanair and Easyjet – whilst we have plenty of options for longhaul via the likes of KLM, Air France and Virgin – not to mention the holiday charter operators.

    So why should the British taxpayer bail BA out? Let it go bust so it can restructure into a sustainable, profitable company instead of chucking taxpayer millions down a black hole. It’s worked for Sabena and Swissair – who rose from the ashes when their respective governments pulled the plug on propping them up anymore.

    It all flies in the face (pardon the pun) of what privatisation is supposed to be for.

  • Dan

    Flag carriers are pointless unless nationalised – it is just spin – after all – they’d outsource jobs off shore if they could do so, so how can they expect favours based on this outdated notion of being a ‘flag carrier’?

    They will get a bail out due to the volcano though – but it will be Europe wide and all the usual subsidy junkiies will be lobbying for it now (seem to recall half hearing someone mentioning this on R4 Today this am – amongst a myriad of daft stories about people getting taxis from Milan to Paris – surely there is an adequate train service by various routes?

    I assume Eurostar is charging no more than its usual walk up fare for the service – That is what I’d expect. It’s EasyRyanBi that I’d expect to rathcet up prices if the boot was on the other foot – so if Eurostar are charging more than the std walk up then that is a rip off, but as I say, I assume not.

  • RapidAssistant
  • Dan

    Rapid the Telwegraph article is pretty much rubbish as it only sets out the issue at the end that this is ‘dynamic pricing’ – so all discounted tickets are sold out – who would expect to tunr up a day ahead and get a discounted Eurostar fare?

    “A Eurostar spokeswoman said: “We are absolutely not trying to take advantage of the situation. It’s quite simply the fact that the demand has taken our prices to the top of our existing fare structure.A spokesman for Virgin Trains said: “There are only a limited number of discounted advance tickets, once those are sold then the normal fares come into play.” ”

    HOWEVER

    http://www.eurostar.com/UK/uk/leisure/travel_information/before_you_go/fares/london_ashford_to_paris.jsp

    This chart shows highest Std fare at £179 FROM London – so what is this £223 fare the Telegraph are quoting. Not mentioned on the fare charts for any class of travel. Does anyone know? My hunch is the general press as (as usual) simply wrong….

  • RapidAssistant

    It perhaps is not indicative of the current situation, but what it does do is highlight the arguments we’ve had for a long time about the railways not providing an reasonably priced turn-up-and-go service when people need it. Sure they may not be openly saying they are taking advantage of the situation, but the company will certainly be enjoying the additional profits they are making out of other people’s misfortune and misery.

    Given the misinformation and blame-shifting that Eurostar did during the snow saga a few months back I’ll take anything I hear from them with a pinch of salt personally.

  • Sean Baggaley

    Eurostar is an international rail operator competing with *airlines*, not a typical national TOC. (And, frankly, Virgin Trains’ turn-up-and-go fares make Eurostar’s look positively cheap. At least Eurostar have the excuse of additional cross-border security requirements to deal with.)

    Given that this is the beginning of the tourist season, it’s also not exactly surprising that their prices are higher than they are outside the high season. They have their *own* passengers to shift too, after all. It’s not as if these trains are just carting fresh air between England, France and Belgium all day.

    Eurostar is also sharing its infrastructure with the Class 395s and “Le Shuttle” services, so there’s an inherent limit to how many trains they can throw onto the tracks at short notice. The tunnel itself is also owned by a completely separate entity, which contributed to the farcical events this past winter.

    Both incidents have proved two things:

    1. We need *way* better crisis management systems in place;
    2. The UK’s international connectivity is shockingly fragile.

  • RapidAssistant

    Interesting that Eurostar is now offering special ‘get-you-home’ fares now into St.P for £89 according to some sources I’m seeing – in contrast to the earlier horror stories of £200+ tickets.

    A gesture of goodwill? Hmmmmmm….

    Or maybe Eurostar management woke up and saw another public relations disaster heading straight for them with the company’s reputation already in the doldums after the winter debacle.

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