When Ryanair is more trustworthy than the Scottish Government

When Ryanair is more trustworthy than the Scottish Government

by Brian Monteith
article from Thursday 1, March, 2018

IT SAYS EVERYTHING about our Scottish Government that Ryanair – that most outspoken, avaricious and horrendous model for customer relations – is to be believed before the democratic manifestation of the people.

This week Ryanair announced that it was closing its Glasgow base from November this year; shifting its one aircraft located there to Edinburgh along with five routes to Londonderry, Lisbon, Sofia, Riga and Berlin. Together with six newly announced routes from Edinburgh (Gothenburg, Hamburg, Memmingen, Stockholm, Seville & Tallinn) some 700 new jobs will be created there. Glasgow will retain only three routes of its twenty-three routes (Dublin, Krakow and Wroclaw) with five going to Edinburgh and the rest closing – putting three-hundred jobs put at risk.

Ryanair give as its primary reason that it had been promised in advance of opening its Glasgow base in 2014 that the Scottish Government would abolish Air Passenger Duty and that this promise had been broken. Ryanair argued it had held on when the Scottish Government shifted its position to halve the APD to 50% on short haul flights but that with what it called a “softening” in demand due to the temporary uncertainty over Brexit it could no longer wait on a promise that showed no signs of being delivered.

The Scottish Government’s response was to blame Brexit.

Since its inception Ryanair won itself lots of friends and customers because of its exceedingly cheap air fares  and large network to destinations previously unreachable directly.  This was, however, despite its brash and sparse passenger cabins, its belief in charging additionally for everything it deemed to be an extra or for minor booking errors. Its manner in dealing with customer complaints lost it further sympathy, to the point that people started using Ryanair as a last resort – where there were no other operators or other competitors were just too expensive.

Eventually Ryanair worked out that its attitude was actually costing it business and about three years ago it started to introduce changes in pricing and customer service that made it a much more enjoyable airline to use. I use flights regularly for business between London, Edinburgh, Belfast, Birmingham, Londonderry, Toulouse, Carcassonne, Rodez, Paris, Brussels, Barcelona and more – and personally I found EasyJet had become (and remains) the airline to avoid, it is dearer, less punctual, with more surly staff and let me say again – less punctual.

I think I have a good understanding of the Ryanair business model, I’ve seen how the airline opens and closes routes and changes operations, even when they might appear busy – the airline clear looks to the bottom line and will only take a hit on a route for so long. And why not, it’s a business, not a charity, or worse a government department that bleeds the taxpayer dry.

So when Ryanair says it is closing its Glasgow base I give some consideration to its reasoning and while there is bound to be some smoke laid for cover I happen to believe that truth is on their side. Here’s five reasons why.

1) APD is a regressive flat tax of £13 per short haul flight, it makes shorter cheaper flights proportionately more expensive. A flight that costs, say, £20 on the ticket is actually benefitting the airline by only £7 – from which any profit must be marginal and therefore requires large numbers to justify the route –  while the government will receive £13 merely just for existing.   APD discourages the use of short haul flights against other modes (such as railways) or from travelling at all. Consequently abolishing or cutting APD would lead to a lift in passenger numbers, which would have justified the expansion of a services out of Glasgow.

2) When Ryanair opened its base in 2014 it would have been after a significant period of building and then reviewing a detailed business case. It is clear from the Scottish Government’s policy at the time of abolishing APD – that Ryanair anticipated the expected lift in passenger traffic would by sufficient to make it worthwhile establishing a base in Glasgow, as well as maintaining the current one in Edinburgh.  The failure of the Scottish Government to deliver its first promise to abolish APD and even its second promise to halve APD would eventually have to be faced up to by Ryanair. The day of reckoning has arrived and routes are being cut, jobs lost and the Glasgow base transferred to Edinburgh.

3) Ryanair’s argument that Edinburgh is a more attractive departure point from Scotland is true. Passengers comment that they find the “experience” of travelling from Glasgow compared with Edinburgh more pleasant, but this is currently no surprise as Edinburgh has become a victim of it own success and is overcrowded as a result (2017 passenger numbers rose to 13.43 million against Glasgow’s 9.9 million). Once Edinburgh’s new Terminal extension opens next year the attitude of passengers – with more space and additional amenities – is likely to alter.

The experience aside, thanks to Scotland’s dislocated transport network – with motorways that don’t link properly and the lack of helpful rail connections –Edinburgh Airport is easier to get to than Glasgow for most Scots. The truth is that Glasgow Airport is on the wrong side of Glasgow – it serves Ayrshire, South and West Glasgow well. For the rest of Scotland, and at rush hour or during special events in Glasgow, even for passengers from Eastern Glasgow and most of Lanarkshire Edinburgh can be easier to reach.

3) Ryanair’s argument that Edinburgh is a more attractive destination (even as a way to reach Glasgow) is also true. All the tourism figures demonstrate this; anything else is just wishful thinking or blind prejudice. This makes locating more routes to and from Edinburgh more attractive to Ryanair.

4) The combination of Edinburgh’s attractiveness as a departure and arrival point makes Ryanair’s routes more profitable as it can charge higher fares.  The distance between Edinburgh Airport and Glasgow city Centre by bus is relatively short (and certainly so by Ryanair standards for airport distances to cities) so it makes sense for Ryanair to fly in and out of Edinburgh and let passengers make there way to and from Edinburgh Airport.

5) “Despite Brexit” is a cliché used by everyone to cover a multitude of problems – soft or falling tourism figures should not be one of them. Visits to Scotland have consistently risen since the EU referendum vote and passenger number in Glasgow and Edinburgh have both benefitted.

Tourism to Scotland rose 2 per cent overall in 2017 to 14.1 million visitors, with overseas arrivals up 14 per cent and – belying the negativity of any Brexit effect – a 1.8 million increase in European visitors. Brexit cannot be justified by the Scottish Government as the cause and is only being mentioned by Ryanair as it fits with its corporate stance of being against Brexit – but it could not blame Brexit directly as passenger numbers have climbed. The truth must therefore be elsewhere. Ryanair would have reckoned on a year-on-year increase in passenger numbers from Glasgow but it is the lack of additional numbers following a cut in APD that has not materialised and thus led to Glasgow’s base and routes being cut.

Ryanair appears to be in the right; the SNP Scottish Government is desperately scrambling for excuses and blaming Brexit – which is a proxy for blaming Westminster – its usual grievance-driven position.

Oh, and if anyone doubts my political motives in accepting Ryanair’s reasoning, then nobody can doubt the motives of Glasgow Airport, which in its statement regarding the decision said, "This is the second example in as many months of an airline cutting capacity in Scotland because of the lack of movement on ADT. The reality is this capacity will be reallocated elsewhere in Europe to countries with more favourable aviation taxation policies to Scotland's detriment."

When the Scottish Government’s position is less believable than Ryanair’s you know it is in real trouble.

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