Ryanair at Brussels Airport

[RoMax]

Ryanair kan lage prijzen nooit houden’.

That is known as wishful thinking.

No it's a known effect at other 'primary' airports where RYR launched flights. Starting with very low prices (often the cheapest fares do not even cover the airport fees), gradually going up over the course of the first half year while competitors slightly decrease their prices. At a certain moment their will be a certain balance with higher Ryanair prices (compared to the current situation) and lower prices of competing carriers (compared to the current situation). RYR will probably still be the cheapest on many occasions, but also the competitors will often have the advantage depending on many factors.
Besides the effect on ticket prices, capacity will go down again as well. Not saying it will be FR's capacity going down, but certainly one or more of the other airlines operating these routes as FR always creates overcapacity (which I don't say is a bad thing, it's part of their strategy and it works). The developments in capacity will go slower than the developments in ticket prices, but in the end, both will change (both for RYR and its competitors).

[Flanker2]

I passed through BSL a couple a days ago, and I say a really provocative Swiss billboard there, saying: 'We'll never be the cheapest, but we sure offer you the best value for your money", and in fact it's smack on, if you think of it, but it does require guts to dare to say that in the face of competitors who's only way of advertising is by publishing their lowest possible fares.

It's kind of ironical. Because that extra money you pay for that "extra value" goes into renting that expensive billboard for Swiss. For the rest it's a seat on a flight. I'd rather do without a free drink and a snack on a 1 hour flight and buy me a few liters of coke and sandwiches for the 100 euro's that I save.
To me it's just a billboard trying to justify for them selling the same thing at a higher price. Some fall for it...

[FlightMate]

I believe the FR brand some said would play in their favor (FR being always the cheapest option in people minds) can play an opposite effect here in BRU. Some people (like me) think they will never fly FR, because of that cheap experience (some have compared their pax as cattle, and behaving badly). I agree, it's maybe only an image. But it could hurt them. I can already see businessmen turning away as they consider the FR experience a no-go. And even if FR increase their level of service to an Easyjet-like, that image will stand for a bit longer.

Hence I see FR stealing pax from Flanders, who didn't want to go all the way to CRL for their holiday flight. And steal pax from themselves (in CRL). Only a few pax from SN then, but imagine just a family of 5 choosing FR over SN, that's 500-1000eur per return. It would cost millions to SN. Just when they are about to turn profitable.

Maybe the best way to go for SN would be to codeshare with FR.
It's probably cheaper to book 40-50 seats to FCO on FR for connecting pax than operate the flight themselves.

Sabena used to do it with VEX in the past (okay, it's not a good example, because Sabena was still a full service airline, and pax with 20.000FB tickets were sitting next to guys with 5000FB tickets. But nowadays, on European flights, the service in b.light is pretty similar than the one at FR. And if FR starts to improve their service, b.flex pax won't even be left disappointed).

The problem remains with business class connecting pax. These could be booked on other partner legacy carriers. (of course, price remaining the biggest issue)

And SN could focus on routes where there is genuine business demand, focusing on service for high yield passengers.

Or, if you comsider that connecting flights are a must (one morning return flight only, but the wrong way), then lower their price just to fill that plane with O/D pax, making life harder on FR. Better than to leave half empty with only connecting pax, anyway.

[Flanker2]

What if... FR would buy SN instead of Lingus?
SN has the low cost base that FR is looking for... all they need is to split the company:
-Open skies EU and EU/US flights using new Irish AOC.
-Africa using Belgian AOC
-Codeshare between both.

[FlightMate]

Probably the best option indeed, for employees (no fear of bankruptcy), for the public (a real low cost in Belgium, even for long haul), for the shareholders (a 100% take-over, if properly negociated).

Everybody happy?

[sean1982]

Except for the unions, and we've allready seen some SN employees follow them blindly.

I believe the FR brand some said would play in their favor (FR being always the cheapest option in people minds) can play an opposite effect here in BRU. Some people (like me) think they will never fly FR, because of that cheap experience (some have compared their pax as cattle, and behaving badly). I agree, it's maybe only an image. But it could hurt them. I can already see businessmen turning away as they consider the FR experience a no-go. And even if FR increase their level of service to an Easyjet-like, that image will stand for a bit longer.

I would just like to point out that we allready carry a lot of business people. In fact, some of our routes I'd say 80% of pax are business people.

[cnc]

FR would have little to gain from taking over SN.
might be even cheaper for them to start from scratch with such operations

[Flanker2]

FR would have little to gain from taking over SN.
might be even cheaper for them to start from scratch with such operations

One could say the same about FR's attempts to buy Aer Lingus for monstrous amounts.
There are several benefits to taking over an existing operation, as opposed to starting from scratch.
It saves money as you don't have to establish new procedures and agreements with third parties, select and train staff, organise the start-up, etc... This in itself costs a lot of money.

BRU could be the ideal base for FR's low-cost longhaul operation, as most importantly there are no slot problems and Belgium already has bi-laterals in place with most countries relevant to such an operation.

That being said, SN would need some significant MOL magic to become a low-cost longhaul airline.

[LJ]

There are several benefits to taking over an existing operation, as opposed to starting from scratch. It saves money as you don't have to establish new procedures and agreements with third parties, select and train staff, organise the start-up, etc... This in itself costs a lot of money.

Staff is a reason not to take over an existing company. Not only do you have to adhere to the agreements made by the company which you take over, you also have cultural issues and/or too much employees (which you have to fire and thus pay them). This increases costs and devotes a lot of management attention the next years (see AF/KL and IAG). Moreover all the itmes you mentions are reasons not to take over an existing company unless the agreements are very favourable and you can't get them otherwise (not happening often in aviation). The only benefit take-overs have is that you gain access quickly. The only ones benefiting are usually the consultants, bankers and lawyers.

[Flanker2]

Staff is a reason not to take over an existing company. Not only do you have to adhere to the agreements made by the company which you take over, you also have cultural issues and/or too much employees (which you have to fire and thus pay them). This increases costs and devotes a lot of management attention the next years (see AF/KL and IAG). Moreover all the itmes you mentions are reasons not to take over an existing company unless the agreements are very favourable and you can't get them otherwise (not happening often in aviation). The only benefit take-overs have is that you gain access quickly. The only ones benefiting are usually the consultants, bankers and lawyers.

Not necessarily. If FR set up a new Irish AOC and transfer most of the crews under that new operation, they will be able to offer SN crews the same benefits as the CRL-based crews, at the same cost as the CRL-based crews.
The remaining staff would then continue to work under the current SN umbrella, as would crews that need to operate under a Belgian AOC, for destinations in Africa and Asia, where there are no open-skies agreements.

With a company split in two, you have perfect segmentation:
-lower cost base for the low-yielding segment, ie Europe and North America, which can be run under Irish AOC
-higher cost base for the higher yielding segment, ie Africa and Asia, with the additional benefit of cheap feeding from the low-yield segment.

I think that the biggest hurdle aren't the unions... it would be LH, unless the remaining shareholders have a way to dilute LH's share and let FR in.

Of course, this is just mental exercise.

[sean1982]

When coming back from the comet flight, I saw two United 777s, both in Star Alliance colours! Impressive...

BRU is really a Star hub. Let's hope FR will not change that...

Is there anyone who can explain me why FR is perceived so much more as a threat then easyJet and Vueling?? I really dont see it?

[Inquirer]

Good evening.
I think that is fairly easy to explain: it's because Ryanair doesnt give the impression of wanting to work with airports (see how they arrived in BRU last week), but rather just uses them as a piece of public infrastructure which has no other reason of being than to be there for them: that may be the case for some of the second tier airports they operate at, but it's no longer the case at the airports they want to start serving.
The obvious fear is that they may start to dictate conditions as they gain importance over there too, conditions which aren't necessarily a win-win, so to say. Isnt Ryanair for instance asking certain commissions on activities within the airport premises at many of the little airports it is active on? Whereas they may now just refrain from doing that at BRU, what is there as guarantee they won't do so in future, say in case they pushed out some important competitors?
BRU doesn't want to end up in the situation CRL is in, which is as good as saturated if I understood it correctly, yet hardly making any money from its operations; remember BRU isn't being funded in the way CRL is, so Ryanair risks destroying their profit margins or worse even force them into losses, even if they bring them more passengers.
If Ryanair wants to play in this league, it's CEO will have to come to understand that he can't really charm a privately owned airport with the promise of x million passengers and some additional peripheral employment, he'll need to bring substance to their bottom line and you can't deny that this bottom line isn't looking very nice at most places Ryanair has a strong presence at because of very though financial demands, so understandably BRU doesn't like them coming.
I do wonder if this a sustainable business relationship, in fact, as there are possibly many ways in which BRU can make the life of Ryanair pretty miserable over there, should they really wish to rid them of this carrier, so the 2 better have a good talk or this bad start can turn into a nasty fight.

[andorra-airport]

Is there anyone who can explain me why FR is perceived so much more as a threat then easyJet and Vueling?? I really dont see it?

Ryanair is known by the general public as ultra cheap , and they think they "wipe out" everybody (exaggerated) because of those cheap prices. Easyjet and Vueling are lesser known for this.

But what many people really bother is that they want that Brussels airport is "big and important", with the best legacy airlines + their largest aircrafts. Rich and important, Ryaniar does not fit in that picture.

[sean1982]

Well Andorra, forgive me to say so, but that's a stupid reason.

Inquirer, I follow your reasoning for a little. However, the only reason why CRL does not make money is because of the low handeling fees. If FR would bring as many movements extra to BRU as they do at CRL paying the same fees as anyone else, they would have a bigger income they will have ever had in the last 13 years.

[andorra-airport]

Well Andorra, forgive me to say so, but that's a stupid reason.

I do not forgive you. So please explain.

[sean1982]

The time that a succesfull airport is only for the "rich and important" has been long past. Look at LGW, AMS, CDG, MAD, BCN ... All succesfull airports with a LOT more traffic then BRU who succesfull combine legacy and LCC operations.

Thanks for your politeness

[sn26567]

AMS? The airport and the Dutch government (which is roughly the same) do what they can to prevent Ryanair to come to Schiphol in order to protect KLM. And CDG is doing exactly the same: MOL has said at his Brussels press conference that there are three major airports in which he would never attempt to go: LHR, CDG and FRA, the main hubs of the three main European legacy carriers.

[sean1982]

André, I said LCC operations: that includes Norwegian, easyJet, Vueling, etc... The world doesnt revolve around what FR does or doesnt do :-/

[FlightMate]

I don't think they'd be able to offer the same conditions as in crl. Remember the 10 years grandfather thing for social security payments? Wouldn't apply for new contracts. Unless of course everybody get based in Ireland, which defies the purpose of basing aircraft in BRU.
The solution could be to apply for a reduction of social security fees, like the belgian airlines did, but the whole purpose was to compete against FR, so I doubt they would manage to get that.

On the other hand, all they need would be long haul planes, with an existing aoc and bilateral agreements.
They could base their B737 at other ports, like they already do, and fly to BRU in the morning for connecting pax, and fly out (a second time?) in the afternoon.

[Air Key West]

MOL has said at his Brussels press conference that there are three major airports in which he would never attempt to go: LHR, CDG and FRA, the main hubs of the three main European legacy carriers.

Indeed, it just shows how mean MOL is. He does not dare to take on the big ones, but he will not hesitate to go for the easy preys. The guy is just disgusting and his practices are appalling.

I wished that those on this forum who are so anti-union and anti-strike (although both are legal) did some introspection and applied the same ethics (which they claim to demand from unions and strikers) to a predator like MOL and Ryanair.