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Dutch Politics Wants Rules Against LCC

Mon Feb 07, 2005 1:38 am

The PVDA (labor party) of the Netherlands stated that the life of Low-Cost Carriers should be thoughened a bit by the state. This is a reaction to the problems in the Dutch Aviation with Holland Exel and DutchBird. The party says regulations for cars/trains and other means of transport are in place, but aviation is more or less free to do whatever they want to. With the result that cowboy-companies enter the market and go bankrupt too quickly. Measures against low-cost flying could resolve this problem.

The largest and 3rd largest party said not to agree with the idea's of the PVDA (2nd largest party).


What are you thoughts on this?? It's a bit strange as DutchBird isn't really low-cost and has been around for quite some years. And charging more money for landing-rights etc. would kill LCC far easier. I believe many companies are already unsatisfied about the fees & taxes at AMS.

If these rules would really apply for the Netherlands we can say goodbye to some companies (FR/EZY/HV) serving the Netherlands, and airports like Niederrhein/Brussels/Cologne would be getting some extra traffic.

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RE: Dutch Politics Wants Rules Against LCC

Mon Feb 07, 2005 1:56 am

Not that I necissarily agree with the point of the labor party, I just want to explain and analyze what they stated. He doesn't mean to tax LCC companies more to turn them away, but just that they get a more thorough check before they start. I believe in the USA the FAA is quite strict in checking if a company has a sound financial and operational plan before they are allowed to operate on passenger services. Lately in Europe it seems that you can start an airline easier, maybe too easy, leaving a mess of unpaid costs and stranded passengers when they go bankrupt after a few months.
So he wants a new airline (he or the journalist too easily called these a "LCC", but a charter or full service Duo- or Legend Air styled carrier would definitely also fall under these rules) to get a check up how it's financed, what their back up operational plans are and how healthy their balance sheet is, meaning they won't leave passengers stranded after three weeks, or even three days like JetGreen in Ireland. So for sure FR, EZY and HV won't have problems as their financial and operational stability has proven itself over the years.

[Edited 2005-02-06 17:59:20]
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RE: Dutch Politics Wants Rules Against LCC

Mon Feb 07, 2005 6:04 am

Well, actually it's not even an official position of the party (although they may agree) but just one MP.

Actually, the guy isn't too well-informed. Even train companies in today's deregulated economy can pull out (Lovers Rail - great name by the way). There are absolutely no regulations in this sense regarding cars. The car dealer would refuse to sell someone a car because they're not financially sound?

I agree that VAT should be charged on kerosene IF governments really want to create a level playing field between aviation and other transportation modes. But this kind of decision can only be taken on a European level.
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RE: Dutch Politics Wants Rules Against LCC

Mon Feb 07, 2005 1:18 pm

The PVDA should meet the Bush Administration!!!!!!!!!
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RE: Dutch Politics Wants Rules Against LCC

Tue Feb 08, 2005 2:49 am

But they do approve the new H-concourse, being built to accommodate LCC's and facilitate a quick turnaround!
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RE: Dutch Politics Wants Rules Against LCC

Tue Feb 08, 2005 4:20 am

Well that's more an AMS issue. I think the point is that they want to discourage "new" airlines to establish/fly in the Netherlands by adding extra rules to it. A healty business plan, enough money etc. This to ensure that an airline will ensure its existence, rather then going bankrupt in a few years. V-Bird may be a very good example.. starting with a huge debt, and heading straight for bankruptcy leaving thousands of passengers stranded.

The question is, the way the politician mentions, if you really should do that by adding more cost to operating an airline, discouraging "gold hunter" to give it a go. After all, adding costs discourages passengers to fly as well. I'd say no.. just have an airline make a good business plan and a good financial basis to start on.

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