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RyanAir: Israeli gov't thwarting Tel Aviv flights

RyanAir: Israeli gov't thwarting Tel Aviv flights

Old Jan 31, 2013, 11:26 pm
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RyanAir: Israeli gov't thwarting Tel Aviv flights

http://www.globes.co.il/serveen/glob...18305&fid=1725

Given how much I am paying for tickets these days, I tend to agree.
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Old Feb 1, 2013, 1:21 am
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The problem with allowing LCC's such as RyanAir to enter the market is that they are able to exploit their extremely low cost structure. That, coupled with economies of scale, will enable them to offer rock bottom fares for as long as possible until they chase out all competitors, such as EL AL and any European legacy directly in competition on any route they fly from the EU to Israel, out of the route at which point they will jack up fares.

I am all for "open skies" and "free competition" so long as everyone has an equal playing field.
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Old Feb 1, 2013, 1:48 am
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Easyjet already flies 10% of pax out of TLV so the LCCs are already here and I pray that they will start flying to more destinations than the 4 they already serve. I also don't see that Ryanair has chased any of the legacy carriers out of Europe with the possible exception of Air Lingus.

It is notable that on the TLV-LON route, that easyjet flies 2x per day, both LY and BA have added capacity on those routes in the last 6 months and haven't reduced fares.

I firmly believe that there is a tremendous pent-up demand for air travel to-from TLV and that opening the skies more will benefit the Israeli economy overall much more than any potential losses at the poorly managed El Al.
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Old Feb 1, 2013, 6:51 am
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Originally Posted by NYTA
Easyjet already flies 10% of pax out of TLV.
Sounds rediclious and impossible! Where do you get that number from?! (maybe you mean 10% of the london route, although I assume there it's more then 10%).
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Old Feb 1, 2013, 8:24 am
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The problem with allowing LCC's such as RyanAir to enter the market is that they are able to exploit their extremely low cost structure. That, coupled with economies of scale, will enable them to offer rock bottom fares for as long as possible until they chase out all competitors, such as EL AL and any European legacy directly in competition on any route they fly from the EU to Israel, out of the route at which point they will jack up fares.
Its called competition, and its generally good for consumers, even if they prefer a better product. I'm surprised given your desire to see LY's cost structure right-sized. Operations like RyanAir are good for Israelis (and tourists) because they'll provide a lower cost option for travelers. I don't agree with LY's protectionist stance here....
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Old Feb 1, 2013, 9:40 am
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http://jssnews.com/2011/08/20/easyje...de-concurence/

Sorry for the French but as of last year this article claims Easyjet is flying 16% of all flights to Switzerland and 20% to London. Not overall.
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Old Feb 1, 2013, 10:46 am
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Originally Posted by NYTA
I also don't see that Ryanair has chased any of the legacy carriers out of Europe with the possible exception of Air Lingus.
Aer Lingus operates to more European/North African destinations now (over 70 outside Ireland at present, ignoring the transatlantic destinations) than at any time in its history.

Ryanair does indeed take some passengers from its competitors (though this effect is somewhat limited on routes where they favour way-out-of-town airports, i.e. Oslo/Torp, Paris/Beauvais, Frankfurt/Hahn), but their biggest impact is actually in growing [new] markets, or rather, creating markets where none previously existed. They have a knack for finding and creating new flyers, rather than just taking the flyers that are already using the incumbent airlines.

Last edited by irishguy28; Feb 1, 2013 at 10:53 am
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Old Feb 1, 2013, 1:57 pm
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I have seen they are trying to buy Aer Lingus which is what I meant but I'm sure they could create new markets from Israel that El Al doesn't even fly to, but they are also competitive in other places that aren't so out of the way - I flew them from MRS to BOD and it cost me something like $50 when the AF ticket was $200 between the same two airports.
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Old Feb 1, 2013, 1:59 pm
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Originally Posted by irishguy28
Ryanair does indeed take some passengers from its competitors (though this effect is somewhat limited on routes where they favour way-out-of-town airports, i.e. Oslo/Torp, Paris/Beauvais, Frankfurt/Hahn), but their biggest impact is actually in growing [new] markets, or rather, creating markets where none previously existed. They have a knack for finding and creating new flyers, rather than just taking the flyers that are already using the incumbent airlines.
Agreed. Flying PFO-TLV will not hurt any of the Israeli carriers, it will simply generate new revenue for the economy. Same with DUB, LPL etc. The only places where they will have an effect on LY will be possibly in BRU, though CRL is not very convenient, as well as LON airports. I don't think that LY should fear Ryanair.

I think they should fear the increase in flights by AF from new bases as well as new SK services etc. Those used to fly with LY through ZRH or VIE. As such, LY loses more and more corporate customers who get projects in smaller European cities like DRS, which will never see Ryanair to TLV service. But they will see increased LH or AB.
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Old Feb 1, 2013, 3:02 pm
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Originally Posted by entropy
Its called competition, and its generally good for consumers, even if they prefer a better product. I'm surprised given your desire to see LY's cost structure right-sized. Operations like RyanAir are good for Israelis (and tourists) because they'll provide a lower cost option for travelers. I don't agree with LY's protectionist stance here....
It is not my intent to advocate protectionism for LY or any carrier. What I am trying to convey is that truly free competition is a good thing, however if a LCC comes into a market, exploits economies of scale and offers ridiculously low fares with the intent of driving competitors into bankruptcy, any benefit the consumer attained from lower fares will be short lived because fares will skyrocket with less competition in the long run. That is the scenario I am saying should be avoided.
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Old Feb 1, 2013, 11:21 pm
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How is this unfair competition? RyanAir needs to bloat their VP level management structure and sign old school contracts with unions to be on equal footing?
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Old Feb 2, 2013, 1:22 am
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Originally Posted by yosithezet
How is this unfair competition? RyanAir needs to bloat their VP level management structure and sign old school contracts with unions to be on equal footing?
No, it becomes unfair competition if/when they flood markets with cheap seats for a period of time for the specific purpose of bankrupting existing market players only to raise fares substantially once that is accomplished.

This is why both the EU and United States have anti-dumping laws which protect local industries from these sorts of players emanating from lower wage economies. The same principal can and is applied to LCC's.

Again, I have no problem with real and fair competition, however I must admit that I share the concerns expressed by LY's management pertaining to LCC's flooding the TLV market for the vary reasons I specify above.
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Old Feb 2, 2013, 2:05 am
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The goal of Ryanair is to make money on TLV routes - not to chase out the competition. Therefore they would prefer to get higher paying pax now - not later, if and when the competition is chased away. So, I would expect the revenue managers of Ryanair to charge just as much as the competition - provided the market can sustain growth in pax ( which I am not sure of). Look at EZ - if you don't book year in advance you have to pay pretty much the same as with BA. As for flood prevention - while I support more competition I am not sure Open skies provides Israeli players with the same level of competitiveness as for the EU based ones. So - what needs more works is the open skies Ts&Cs - while Ryanair should be welcomed in - if they choose to.
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Old Feb 2, 2013, 2:07 am
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Originally Posted by yosithezet
How is this unfair competition? RyanAir needs to bloat their VP level management structure and sign old school contracts with unions to be on equal footing?
No - they should pay for same level of security LY gets.
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Old Feb 2, 2013, 3:10 am
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Also notable that Wizz and Pegasus both are LCCs and fly to TLV.
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