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FR To Quit PRG Version 2  
User currently offlinedavid_itl From United Kingdom, joined Jun 2001, 7442 posts, RR: 13
Posted (4 years 7 months 4 weeks 1 day 23 hours ago) and read 5706 times:
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Article says they are quittting PRG.

Comment: Another "major" airport that doesn't want to prostitute itself with FR operating there, following in the footsteps of MAN. One wonders how many more airports will be doing that? I would anticipate that nearby airports desparate for business may be contacting them shortly.

[Edited 2010-04-27 13:28:02]

48 replies: All unread, showing first 25:
 
User currently offlineMYT332 From United Kingdom, joined Sep 2003, 9112 posts, RR: 70
Reply 1, posted (4 years 7 months 4 weeks 1 day 23 hours ago) and read 5588 times:

Wow, part 1 must have got full quickly!

It's nice though that PRG are too following MAN's footsteps just as OK have restarted service to MAN from PRG



One Life, Live it.
User currently offlineeicvd From Ireland, joined Mar 2008, 2188 posts, RR: 5
Reply 2, posted (4 years 7 months 4 weeks 1 day 23 hours ago) and read 5571 times:

Quoting MYT332 (Reply 1):
It's nice though that PRG are too following MAN's footsteps just as OK have restarted service to MAN from PRG.

So lets hope the restart PRG-DUB too 


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19259 posts, RR: 52
Reply 3, posted (4 years 7 months 4 weeks 1 day 23 hours ago) and read 5516 times:

PRG presently has 4 FR routes: from BHX; DUB; HHN; and NRN. Based on the week-commencing 27th May, FR has 14 weekly flights to PRG.

W6, effectively the FR of Central and Eastern Europe, and FR effectively ignore each other. W6 presently has 15 routes from PRG, a growing base. While I very much doubt it'll add BHX and DUB, it is likely that it will add HHN (presently has 3 routes there) and NYO (5).

[Edited 2010-04-27 14:25:22]


"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 4, posted (4 years 7 months 4 weeks 1 day 22 hours ago) and read 5428 times:
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Quoting eicvd (Reply 2):
So lets hope the restart PRG-DUB too

Isn't that what MA did? Didn't Ryanair have some problems with BUD as well?


User currently offlineeicvd From Ireland, joined Mar 2008, 2188 posts, RR: 5
Reply 5, posted (4 years 7 months 4 weeks 1 day 22 hours ago) and read 5345 times:

Quoting ju068 (Reply 5):
Isn't that what MA did? Didn't Ryanair have some problems with BUD as well?

MA have restarted DUB but FR still fly the route.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 6, posted (4 years 7 months 4 weeks 1 day 22 hours ago) and read 5291 times:
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Quoting eicvd (Reply 6):
MA have restarted DUB but FR still fly the route.

I know, they have been flying since the 28th of March, but didn't FR have a dispute with BUD over the fees? I am sure that MA was hoping for them to pull out...


User currently offlineeicvd From Ireland, joined Mar 2008, 2188 posts, RR: 5
Reply 7, posted (4 years 7 months 4 weeks 1 day 22 hours ago) and read 5271 times:

Quoting ju068 (Reply 7):
but didn't FR have a dispute with BUD over the fees?

I have no idea to be honest.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 8, posted (4 years 7 months 4 weeks 1 day 21 hours ago) and read 5214 times:
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Quoting eicvd (Reply 8):
I have no idea to be honest.

Here just found it:
Ryanair Threaten To Quit BUD (by david_itl Mar 28 2010 in Civil Aviation)?threadid=4758558&searchid=4759314&s=bud#ID4759314


User currently onlinekl911 From Czech Republic, joined Jul 2003, 5301 posts, RR: 15
Reply 9, posted (4 years 7 months 4 weeks 1 day 21 hours ago) and read 5117 times:

Quoting eicvd (Reply 2):
So lets hope the restart PRG-DUB too

And pay 10x more for the same seat? No thanks. I'll take FR anytime over OK and its ridiculous high fares.


User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 10, posted (4 years 7 months 4 weeks 1 day 12 hours ago) and read 4869 times:

Quoting Pe@rson (Reply 4):
W6, effectively the FR of Central and Eastern Europe, and FR effectively ignore each other.

Looking at the article, it seems that FR has offered to open a 6-aircraft base at PRG, when fees would be lower. That wouldn't be ignoring, that would be head-to-head competition in many markets.

W6 has currently 3 aircraft based at PRG. When FR would start a base at PRG, this would certainly affect W6, as well as OK. Now, when FR would just replace W6 and OK, PRG would be the loser.

It's quite comparable to BSL; here FR withdrew and U2 filled the gap.


User currently offlineSAAB900 From United Kingdom, joined Sep 2007, 490 posts, RR: 0
Reply 11, posted (4 years 7 months 4 weeks 1 day 9 hours ago) and read 4615 times:

Good for PRG! Its about time another airport followed MAN's example & stood up to FR bullying!


Quoting Pe@rson (Reply 4):
W6, effectively the FR of Central and Eastern Europe

Please, W6 are a far better airline than FR will ever be! Having flown with both you certainly dont get to feel like your flying with a LCC with W6, whereas you do with FR!

Dave(SAAB900).


User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 12, posted (4 years 7 months 4 weeks 1 day 9 hours ago) and read 4513 times:

Quoting SAAB900 (Reply 12):

Good for PRG! Its about time another airport followed MAN's example & stood up to FR bullying!

When BA almost completely left the regional airports, was that bullying too? Or when Iberia basically shut down all it's operations from BCN? Or when SK stopped flying long-haul from OSL? Or when OK stopped long-haul from PRG? Was that bullying? Or when EI withdrew from LGW? Or, a bit more close, when U2 closed their AMS base in 2003?

If no, then why is FR "bullying" when they do not keep or expand services at a certain airport?


User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 13, posted (4 years 7 months 4 weeks 1 day 9 hours ago) and read 4504 times:
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Quoting joost (Reply 13):
When BA almost completely left the regional airports, was that bullying too? Or when Iberia basically shut down all it's operations from BCN? Or when SK stopped flying long-haul from OSL? Or when OK stopped long-haul from PRG? Was that bullying? Or when EI withdrew from LGW? Or, a bit more close, when U2 closed their AMS base in 2003?

Well it doesn't meant that all of them pulled out because they couldn't secure cheaper fees. I assume most of those got canceled as they weren't generating enough cash. I am sure the situation here is quite different.


User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 14, posted (4 years 7 months 4 weeks 1 day 9 hours ago) and read 4468 times:

Quoting ju068 (Reply 14):

Well it doesn't meant that all of them pulled out because they couldn't secure cheaper fees. I assume most of those got canceled as they weren't generating enough cash. I am sure the situation here is quite different.

Is it? If the routes from PRG are very profitable, why would they drop it? That would be quite stupid, wouldn't it? For some airports, FR is paying quite high fees (MAD, LGW, STN, DUB), but they still make a profit.

And wouldn't the aforementioned airlines have tried to negotiate lower fees, or to receive subsidies, to keep the operations? Of course they have tried. Actually, NOT trying to get aid for non- or little-profitable services, is very stupid.


User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 15, posted (4 years 7 months 4 weeks 1 day 8 hours ago) and read 4435 times:
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Quoting joost (Reply 15):
Is it? If the routes from PRG are very profitable, why would they drop it? That would be quite stupid, wouldn't it? For some airports, FR is paying quite high fees (MAD, LGW, STN, DUB), but they still make a profit.


Maximize profit maybe? And anyway I am sure since they were planning on making their base there those routes weren't really unprofitable. If a route, or a few of them from one destination is not making you a profit then your next logical step would not be making your base there, but in stead just leaving the market. That is what those other airlines you mentioned before did. Plus this is not the first time Ryanair is doing this. Are you saying their MAN or BUD bases weren't making money?

Quoting joost (Reply 15):
And wouldn't the aforementioned airlines have tried to negotiate lower fees, or to receive subsidies, to keep the operations? Of course they have tried. Actually, NOT trying to get aid for non- or little-profitable services, is very stupid.

Looking at the airlines mentioned above (with the exception of U2) it seems more like a restructuring plan and cost cutting measures than simple boycott of the airport caused by high fees.


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19259 posts, RR: 52
Reply 16, posted (4 years 7 months 4 weeks 1 day 8 hours ago) and read 4437 times:

Quoting SAAB900 (Reply 12):
Please, W6 are a far better airline than FR will ever be!

Whatever. W6's strategy and operations are very similar indeed to FR's.

Quoting joost (Reply 11):
Looking at the article, it seems that FR has offered to open a 6-aircraft base at PRG, when fees would be lower. That wouldn't be ignoring, that would be head-to-head competition in many markets.

Yes, the creation of an FR PRG base would, with reference to the routes operated by W6, have inevitably resulted in considerable route overlap and competition. Indeed, I find it too coincidental that FR suggests it would have created a PRG base when it and W6 almost exclusively avoid one another. Of course, this probably means little, but it is nevertheless rather telling and interesting... And something that we cannot definitively talk about.

Quoting SAAB900 (Reply 12):
stood up to FR bullying!


It’d be funny if you were an airline CEO. I suppose fee renegotiation would go something like this:

Airport: we want to increase the fees you pay by 50%

Your airline: No, no, no! How can you do this? That’s far too generous! We’ll pay you 75% more! Who cares that you’re merely a supplier to us? Who cares that if we continually take this approach, both to airport fees and everything else, our costs will skyrocket and our all-important cost differential will be lost? In the interests of fairness, which, after all, is what is most important, certainly not nasty profit, we’ll pay you 75% more this year. No, wait, make that 85%.

  

Clearly, costs must be controlled and reduced. And if FR is unhappy with what is being charged at PRG and if negotiations to reduce costs, based on far greater volume generation, prove fruitless, then it should rightly leave and go to airports that will be more accommodating. Think MLA, FAO, AGP – three very new bases, amongst others.

[Edited 2010-04-28 04:17:10]


"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 17, posted (4 years 7 months 4 weeks 1 day 7 hours ago) and read 4295 times:

Quoting ju068 (Reply 16):
Maximize profit maybe?

I always thought that that's what any business is supposed to do. (of course, while staying within the boundaries of good coroporate governance).

Quoting ju068 (Reply 16):
Plus this is not the first time Ryanair is doing this. Are you saying their MAN or BUD bases weren't making money?

I don't know. But the fact that they have kept DUB-MAN, but closed the other routes, makes me think that MAN-BUD was too profitable to drop, and the others were probably just around average.

Now of course, I do not disagree that the way how FR (and other LCCs) negotiate is different than from traditional carriers. But that's quite a common aspect for low-cost companies or new entrants - in any market, not just in aviation: trying to negotiate prices that were supposed to be non-negotiable. It works well for them.

Most airlines negotiate landing fees, but they try to keep everyting outside the media. That's because of a different view on marketing and positioning the brand, it doesn't say anything about how though negotiations are.

Quoting ju068 (Reply 16):
If a route, or a few of them from one destination is not making you a profit then your next logical step would not be making your base there,

Margins are tight. FR's average margin now is EUR 8 per passenger. So 1 or 2 euro off the landing fees can increase profits (or losses) by double digit numbers. Now purely hypothetical, assume that PRG routes have an average margin of EUR 6.50 per pax, and FR asks PRG if they can bring down handling fees by EUR 2, than it makes a difference between an underperforming and a well-performing route.


User currently offlineSAAB900 From United Kingdom, joined Sep 2007, 490 posts, RR: 0
Reply 18, posted (4 years 7 months 4 weeks 1 day 7 hours ago) and read 4208 times:

Quoting joost (Reply 13):
When BA almost completely left the regional airports, was that bullying too? Or when Iberia basically shut down all it's operations from BCN? Or when SK stopped flying long-haul from OSL? Or when OK stopped long-haul from PRG? Was that bullying? Or when EI withdrew from LGW? Or, a bit more close, when U2 closed their AMS base in 2003?

If no, then why is FR "bullying" when they do not keep or expand services at a certain airport?

With possibly the exception of U2 at AMS Im not aware that any of the others you mention asked for reduced fee's? If routes aren't making money then they probably will be dropped thats only to be expected! What I do object to is FR trying to use the old "Im FR one of the biggest & best airlines in Europe, if you dont give me reduced fee's then I'll pull out altogether" & then expect the airport's to s**t themselves & give in! At some of these airports other LCC's manage with paying the fee's without crying so why cant FR?


Quoting Pe@rson (Reply 17):
Whatever. W6's strategy and operations are very similar indeed to FR's.

I ddn't say that they weren't! But in my eyes & probably in the traveling public's eyes W6 are the better airline who even though they both do the same job seem to get on with it without all the drama that FR do!

Dave(SAAB900).


User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 19, posted (4 years 7 months 4 weeks 1 day 6 hours ago) and read 4140 times:

Quoting SAAB900 (Reply 19):
Im not aware that any of the others you mention asked for reduced fee's?

Which means they haven't?

Quoting SAAB900 (Reply 19):
What I do object to is FR trying to use the old "Im FR one of the biggest & best airlines in Europe, if you dont give me reduced fee's then I'll pull out altogether" & then expect the airport's to s**t themselves & give in!

I think that's just your personal interpretation. At least, when looking at interviews with airport directors from airports where FR left, I have hardly ever read such feelings. It's always just refered to as a business decision.


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19259 posts, RR: 52
Reply 20, posted (4 years 7 months 4 weeks 1 day 6 hours ago) and read 4136 times:

Quoting joost (Reply 20):
It's always just refered to as a business decision.

Hear, hear. I don't understand why A.nutters so frequently believe it's more than that. If they can't reach agreement, then FR can simply take its business elsewhere.



"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 21, posted (4 years 7 months 4 weeks 1 day 4 hours ago) and read 4019 times:
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Let's say that MAN did give them lower fees but refused to give the same to EasyJet. Does this mean that EasyJet could complain to the EU court? Isn't there something like competition law... I think I heard something about it. In Serbia we call it anti-monopoly law... so I guessed that there must be something similar in the EU.

User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 22, posted (4 years 7 months 4 weeks 1 day 4 hours ago) and read 3987 times:

Quoting ju068 (Reply 23):
Let's say that MAN did give them lower fees but refused to give the same to EasyJet. Does this mean that EasyJet could complain to the EU court?

Roughly:
when it's a state-owned airport, they're not allowed.
when it's a private airport, they can do what they want

That's apart from how much it damages the relationship with a valuable customer like easyJet...


User currently offlineju068 From Vanuatu, joined Aug 2009, 2776 posts, RR: 6
Reply 23, posted (4 years 7 months 4 weeks 1 day 4 hours ago) and read 3982 times:
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Quoting joost (Reply 24):
Roughly:
when it's a state-owned airport, they're not allowed.
when it's a private airport, they can do what they want

That's apart from how much it damages the relationship with a valuable customer like easyJet...

Ah thanks... so basically if they have formed their base in Prague and the fees would have been lower than CSA and Wizz, they could have easily sued them and finished with the whole story? no?


User currently offlinejoost From Netherlands, joined Apr 2005, 3186 posts, RR: 4
Reply 24, posted (4 years 7 months 4 weeks 1 day 3 hours ago) and read 3941 times:

Quoting ju068 (Reply 25):
Ah thanks... so basically if they have formed their base in Prague and the fees would have been lower than CSA and Wizz, they could have easily sued them and finished with the whole story? no?

Haha, no it's not that easy.

It's not illegal to offer different prices to different airlines per se. It is unlawful to spend public money in helping one company to compete unfairly with other companies. But it's a vague definition and that's why these cases are far from easy.

Now, it would be unlawful to give Ryanair lower landing fees just because they are Ryanair. But it is allowed, for example, to give lower landing fees to airlines who open new routes. However, every airline needs to be able to qualify for this subsidy.

It is allowed to offer volume discounts. It is allowed to offer start-up subsidies. It is allowed to charge lower fees for a lower service level. It is allowed to charge lower fees for off-peak movements.

HOWEVER

It is not allowed to define the rules in such a way that de facto, only one or two airlines are able to qualify.

To give an example: Marseille airport charges lower fees for Terminal 2 than for Terminal 1. Each airline can decide whether to use Terminal 1 or 2, and pay the corresponding fees. FR, U2, 4U use Terminal 2. So far, so good. But now Air France has filed a complaint that Terminal 2 is too cheap compared to Terminal 1/3/4, and they claim that T1/3/4-users effectively pay for the T2-users, and / or that public money is used to promote T2. Now that comes down to how to account all costs involved in the operations of the airport. And that makes it extremely complex to judge whether the distribution of costs is "fair". That makes court cases around these issues very time-consuming.

An easier example, to provide lower fees for new destinations, sounds logical. But think of this: FR or W6 will, in these cases, try to get subsidies for NYO, TRF or BVA. Now, should these be classified as "new" destinations (no airline served these airprts from PRG before), or as existing destinations (as ARN, OSL and CDG already had service)?

And IF the airport operator would consider it as new services, now would this be unfair aid to FR / W6, as they are the only airlines to actually use such airports.

Just some examples why this is never easy.


25 Post contains images ju068 : Ah thanks a lot for the excellent explanation!!! Now I understand it
26 Post contains links and images L410Turbolet : They'd have to stoop much lower in their service and attitude towards customers to became the "Lidl with wings" aka Ryanair. Following its decision e
27 Pe@rson : Well, FR frequently earns huge net profit, so who cares whether it is "low class"? It is a for-profit business, and it's found a way to make what cou
28 david_itl : So why the need for subsidies from airport operators and local governments then?
29 Pe@rson : So you'd say 'no, don't bother giving us money!' ? I'd get all I could get. Strange if you wouldn't.
30 L410Turbolet : There are other airlines around the world which somehow manage to generate huge profits without their CEO being such an obnoxious attention whore and
31 Pe@rson : Very few. But, whatever works for each specific airline. And, really, who cares? Source please![Edited 2010-04-30 02:10:01]
32 lukeyboy95 : I agree with you here. Despite not knowing exactly what goes on behind closed doors - to quote that much loved song- its quite evident that FR put ai
33 bestwestern : But most people wont. Ryanair charges as much as they can to ensure the highest revenue for every flight. £1.50 x 189 x 365 x number of flights dail
34 Danny : It's just a PR game. Two years ago they annouced their withdrawal from Krakow. By now they operate more flights thatn before their "withdrawal"
35 joost : That's just business. Local airports and governments want air service and are willing to pay. Ryanair is willing to provide these air services. In a
36 babybus : The trouble with FR leaving places like PRG and BUD is that it is the people of those countries that suffer. Wages are lower in Czech and Hungary than
37 joost : Why should the governments subsidize their residents to work abroad, and earn money abroad?
38 lukeyboy95 : Indeed, and on the PRG and BUD routes there have been very few promotions for the two years or so. DUB seems to be following the same pattern of fewe
39 bestwestern : Less capacity = less promotional fares = more profits
40 lightsaber : I agree. Part of the PR business model is to do crazy things to get into the press... then undo them. It is probably just a negotiating tactic.
41 Cassi : Thanks for this great suggestion! After all, our government already subsidizes rail travel, MA (with millions of euros per year), why not add FR to t
42 joost : Making a deal with FR is not necesarily a bad business decision. Hochtief apparantly chooses for their airports (in Europe: DUS, HAM, BUD, ATH, TIA)
43 lightsaber : You have a good point. Assuming FR does make only 8 Euros profit per passenger... than showing they are serious about cutting 1 or 2 Euros of costs p
44 Humberside : But FR are pretty insignificant at both airports. Both airports have Wizz Air, and Prague Smartwings too, as well other LoCos operating from their ow
45 Post contains images L410Turbolet : That's pretty illogical assertion. Don't all airlines cater solely to those who can afford to travel? And given the economic climate I don't see any
46 Viscount724 : They can earn higher salaries by working abroad and send a significant proportion of their salaries back to their families in their home country. Loo
47 Post contains images Pe@rson : You honestly think I care if FR pull out of PRG (or, for that matter, anywhere)? If you do, think again.
48 neutral : I'm sure Aer Lingus at Dublin are quite happy at Ryanair's so called reduction of aircraft based at Dublin look at the facts how many routes have Rya
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