TheLocalYokel
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- Jan 14, 2009
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- #761
Absolutely right about easyJet and BRS in my opinion - I have no doubt that incentives were provided to attract, keep and expand the airline and its route network, but that is within the context of the airport company still having to make an overall profit that satisfies its shareholders. The difference with CWL, and the WG has not demurred publicly, is that returning the airport to profit is no more important at this stage than using it as a catalyst to improve Wales’s economy and this, from the government’s perspective, is laudable. A private sector airport could not afford to carry a loss-making facility for a number of years without going out of business and, anyway, its responsibilities are to its shareholders and not with helping the local economy, although if the two coincide then so much the better.Well so far whatever the financial deal between the airport and Flybe is it seems to have worked for both. Flybe found a home for 2 unwanted aircraft and the airport has got a substantial route network and has increased the amount of people using it. The base is now 3 aircraft so Flybe must be happy with it.
Incentives and special rates happen in all industries. Personally I'd be surprised if say Easyjet didn't have some sort of incentive/special rate at BRS or TUI got one to reintroduce and then continue to expand the long haul routes at BRS. Or Jet2 at STN and BHX to launch those bases. Same with Qatar Airways at CWL as well. In the end the airport has to use everything available incentive it has to attract and keep airlines and get them to expand at CWL become the airport everyone wants it to be.
As for Flybe's pricing it changes everyday. I've seen some prices on Faro and they have been quite high. Sometimes over £150 one way so that and the fact that they added a weekly flight may well suggest they are doing well on the route despite Ryanairs presence. I also wonder if Ryaniar may have helped them rather than hinder them.
Under EU law a state-owned facility of any type cannot use its favoured position to gain a competitive advantage. One test is reckoned to be prudence. Is a state-owned company acting in a way that a prudent private sector company could not? Individual examples are always going to be arguable and until and unless overwhelming evidence is forthcoming to show that a state-owned facility (and I'm not just thinking of airports) is abusing its position it has to be accepted that it is not.
For the avoidance of any doubt I'm not suggesting here that the WG is abusing its position in its ownership of CWL. What I am saying is that they seem to have found a creative formula to bring back to their airport an airline that had axed some of its routes not much more than a year before, and that the airline's profit/yield might be calculated currently by slightly different means than is the normal. I can also see clearly that Flybe is becoming ever more successful in the number of people using its flights at CWL and in the end that ought to lead to the airline becoming 'self sufficient' at the airport in time, if it is not already so.
I will also say that I cannot think of any region in the UK with an airport that had been having a tough time, as CWL was going through a few years ago, that would not have jumped at government help. Some Plymothians - you only have to read their local press - are demanding that the government helps PLH (currently mothballed) to reopen and fingers have been pointed at both CWL and PIK with comments that if it's right for them why is it not right for PLH? Unfortunately for Plymouth, they don't have a snowball's chance in hell of the UK government riding to their rescue.