Ryanair’s €5 Gambit

Ryanair’s inauguration of its latest flight out of Malta is in the news today (Malta-Trapani). Also in the news was Ryanair’s increible offer of one million seats at €5. People still question whether this policy of Ryanair’s is reasonable (not sure there). They also wonder whether Ryanair should be more clear about the fact that €5 does not include taxes and whatsnot (they should). Commenting on an online newspaper someone also commented:

By no stretch of the imagination can the € 5 cover all the Government and Airport Taxes. This goes to show that Ryanair is being aided and abetted to act in breach of competition laws and being given an unfair advantage over legacy carriers like Air Malta who have to collect and pay Government and Airport taxes making their air fares artificially inflated.

The usual rant you would say. His is not the full picture though. Ryanair’s is a commercial gamble – it has not got much to do with breach of competition of laws as it has with the defiance of costs, supply and demand. To an ignoramus like me the reason Ryanair can afford cheap flights is precisely because it cannot. Nobody can really. They are underpriced because Ryanair is gambling on slicing into huge parts of the market. It tries to get customers dependent on the “cheap” idea then runs up the ‘collateral damage’ – or extra costs.

There’s the amount of luggage, the weight of the luggage, the price of food on board, the transport to and from the airports of choice and more. Contrary to popular perception, Ryanair is not “doing well”. Rather it’s recent losses inspired newspaper titles such as “Ryanair got it wrong”. Their Shannon base in Ireland is about to have 400 jobs cut off in order to minimise losses.

The latest setback for Ryanair was during negotiations to order 400 new planes. It tried the usual tactic of bullying with numbers trying to provoke a price war between Airbus and Boeing. Airbus’ answer was simply:

We are not in discussions with Ryanair about aircraft. That is on the record. We don’t have plans to enter a sales campaign with Ryanair, which would be very expensive and very time-consuming.

Clearly Airbus sees this as nothing more than a ploy to negotiate with Boeing, and acknowledging Ryanair was likely never going to place an order with the company. The outlook is not so bad for the airline of the Harp. Despite gross incompetence over the past year with regard to hedging contracts for the price of fuel Ryanair is expected to recover though their plan for transatlantic flights might have to be shelved for now.

Next time you are on a Ryanair flight with your knees rammed firmly into the neck of the passenger seated in front of you do bear in mind that your “cheap” trip is a result of a gambit that relies on numbers, numbers and more numbers.  When you realise that the costs for your flight plus collaterals cost you much more than that €5 ad you saw don’t complain… just go “baaaaa”

After all the choice is yours… and that’s what matters really.

Bruxelles la Moche

I never really liked Brussels. I’ve tried long and hard to give the city a chance but it has just about as much charm as a Maltese village lady all dolled up for festa night. More often than not I get to town by train. It is as though a guided tour of the human body were to start from the backside. You travel through the entrails and uglier sides of the city quietly hoping that it will, at some point, get better. Little do you know that that’s it… a sort of railroad WISYWIG tour before you hit the streets. You should have known it after all – this is the town whose main highlights are a pissing boy, a giant monument of an atom and of course a square that gets covered in flowers every now and then.

Yet tourists hit Brussels in droves. The cram every nook and cranny of the garish streets shopping for hideous souvenirs, stuffing themselves with chocolates and downing the beer. It’s not Ibiza because there’s no sun and there’s no sea. There’s grey building after grey building, badly signed roads (don’t think of driving in this mess) and unhelpful citizens with a chip on their shoulder about the other half of their country depending one whether you meet a Flemish or a Walloon.

Then there’s the smell. There’s a particular whiff to Brussels. Every big city has its particular smell. Rome, London, New York.. they all smell of big cities in their own particular way. Brussels smells of its stations. Whatever station you get you immediately greets you with a “let me knock you out” kind of stink that threatens to hang around until you’ve left. It’s unwelcoming and it’s there to stay. You’re screwed.

The smell hit me this time round even before I stepped off the train. When the doors opened in station “Luxembourg” the whiff reminded me of why I cannot stand Brussels. If scraped the dirt off a hundred tramps and created a concentrated perfume out of that you could definitely market it as Eau de Bruxelles. I had promised to try and give it the umpteenth chance. To let it charm me and show me its beautiful underneath that makes so many people wax lyrical about its cosmopolitan qualities.

 I tried. I really tried. Promise. It was really the bastard taxi driver who sent me on a wild goose chase in the opposite direction of the hotel I was meant to go to. “Walking distance” became long slog and trek in the frozen stink of Brussels at sunset. Sunset at minus a couple of degrees with the sun’s playful rays nowhere in sight.

So. There it is. I’m here…. still waiting for the charm to hit me. I think I’ll go get some fries…. not that they’re as good as the ones in Brugge (yep.. Brugge) but they’ll have to do.

Diaries of a Visiting Expat (2)

Been to panto yesterday. The MADC one actually because now you have to specify which one it is. I was never really a panto kind of person but having been roped into acting in one some years back (don’t ask) I tend to follow the developments with a mild enthusiasm. The Christmas Pantomime is part of the anglo-saxon staple diet of Things to Do At Christmas Time. The package includes spoof of the elders, fun and entertainment for the kids and a good excuse for men to wear tights, don makeup and wear lipstick. That just about sums it up. It’s a bit of festive fun that is mostly harmless.

There is nothing wrong however in expecting a panto to have a script that, while allowing for the normal suspension of belief that is required for any kind of theatrical performance, is consistent and has some form of story line that is thread through. There as something missing in this year’s MADC Panto. Granted it lacked whatever “gravitas” the Manoel could give it but still… too many characters seemed to have been banged in at the last moment. Too many self-referential lines, and way too many paranoid jibes at the newly discovered competition. 

It’s ok to poke fun at Masquerade or whatever other company is busy climbing beanstalks but if you nag ne time too many then the audience will get the same feeling as an uncomfortable onlooker who finds himself bang in the middle of a family feud. I promise I am doing my best not to gripe but, to put it in the words of the Dame, I asked myself: “Myself.. are there not too many jokes that have fallen flat? Myself… are they not milking the kinky-sex innuendos one time too many?” As Lorna would say, I myself think that the whole business  lost the tempo one time too many. 

The danger of writing a panto script that centres around a Magnificent Dame like Montanaro is that there is the huge risk that the Dame can steal the show leaving everyone in the shadows. In this case it even got worse, because for long periods there was no show to steal barring some good individual performances. One could not help wondering whether Montanaro would be better off having a one man Christmas stand up show thus avoiding all the bother of having to force some kind of storyline that mixes up red blood cells, Einsteins, Super Mario characters and Turks and Knights. 

Just in case you were wondering we are being too negative, we did find that the songs were well performed and that when the tempo was just right we got the illusion of being at the Christmas panto and not at the obligatory performance of a miffed theatrical troupe that cannot get over not being at the Manoel. Otherwise it all risked going haywire and the worst part of it would be the kid’s worst nightmare… that some Evil concoction has stolen the best part of Christmas…

The chip on your shoulder…? It’s behind you!!!

Dura lex, sed lex

Damn. Why can’t I enjoy my holiday in peace? I was trying to have a little break from blogging but the Transport Federation’s activity these last days begs many a comment. I doubt many people are out of the loop on this one but for the benefit of the readers still stuck in the Benelux who count on J’accuse for their pill of information, the news in a nutshell is: Government starts liberalise sectors of Public Transporrt, all PT operators group into a Federation, Federation strikes.

Liberalisation is overdue. Even in sectors where liberalisation is questionable (like the hearses – due to market size) we have long had decisions by the local “authority” stating clearly in black on white that the market operators can no longer be exempted from Competition Law (vide Case Ex 1/2001 “Funerali”). Competition law is essentially what most of this is about. The MLPN style of government can no longer afford to ignore the issue – it has sat on, and appeased, the current transport system for too long and now is forced to act. Once again it is not an intelligent, planned move but definitely the rabbit staring at the headlamps and twitching into limited grotesque action. EU laws on competition do not allow the current state of affairs and it was only a matter of time before we would have had another set of cases on our hands.

Hence we are off to liberalising hearses, taxis, minibuses and buses. Music to our ears but this action, courageous as it may be does not win  points with the arrogant, intelligent voter. The list of culprits is long. It begins with Mintoff, salvatur ta’ Malta, who gave us roads, hospitals, running water (more not than often) and a peek at Minister’s colour televisions. It was under Mintoff for example that an ingenial solution was found for buses and bus drivers. At some point it was noticed that buses are uninsurable – maybe because they are driven by wreckless oafs and ex-criminals (not all mind you). So what did Salvatur do? He forced the insurance companies to create an insurance fund that would be OBLIGED to insure buses that would otherwise only be considered insurable by an insurance agent on drugs.

The net result is basically that inefficieny and wrecklessness was encouraged. Twenty years into the nationalist government and the fund is still there. So no blaming Mintoff please. Then there were the different sectors. Each given licenses to work, each guaranteed a monopoly and each given assurances that they would be there forever. Evviva l-vot. MLP is the next big culprit. Yes, MLP with its NO Campaign. A ridiculous campaign that led to the PN having to cut deals with the devil and his brother in order to achieve a YES vote for the EU.

These are the truths of the effect of joining the EU. That inefficiencies like our whole transport system would crumble under an effective legal regime. That’s the law… a harsh law. Which is why to the intelligent person, hundreds of blue clad drivers yelling insults at the poor overworked police and army (immigrants, youth in paceville and now bus drivers.. when is their hell going to end?) are just a bunch of cowboys. The drivers are in an ironic situation because their argument that under an efficient competition system they would go bankrupt is true. And it is just because it is true that it is so desperately needed. Because competition is an incentive for getting your act staight – just like in the political party field, so it is in most other markets – competition is healthy because participants need to be at the best in their game to attract business.

And given the choice between a troglodyte driven creaking bus with hopeless routes and a potential new system with educated drivers, clear planning and efficient deliveries… whose side would you be on?

There’s much more to write but the beach beckons. It’s as far from Valletta as I could get… feel free to use J’accuse to vent your frustration at the eejits. The newspaper sites seem to be blocked so I guess one site is as good as any other.

Luxemburgensia (5): Lost Luggage

You’d think that the bigger the airline the more chances that it has a bad record of lost luggage. The magic of math however allows you to compare big and small airlines on the basis of ratios. They basically caclulate how many bags per one thousand bags go missing. The latest information on this matter was recently released by the Air Transport Users Council. Unsurprisingly British Airways top the list of lost baggage rations with 26.5 bags per 1,000. Here’s part of the report from the UK Independent:

British Airways lost more baggage per flight last year than almost any other airline in Europe.

The annual figures from the Air Transport Users Council, released today, show that in 2007, 26.5 bags per 1,000 were delayed during BA flights, compared to a European-wide average of 16.6. The only airline with a worse record was TAP Air Portugal, with a delayed-bags ratio of 27.8 per 1,000, but the figures will be more grim news for BA which was found to be the poorest performer in Europe in 2007.

Although TAP lost more bags on average last year, the data shows BA’s record is getting worse. The airline lost an extra 3.5 bags per 1,000 in 2007 than the previous year. BMI, the only other UK airline with a below-average performance, had a lost-bag ratio of 17.0 while KLM (19.7), Alitalia (19.7), Air France (17.6) and Lux Air (17.2) all fared below par. Air Malta and Turkish Airlines were the best-performing carriers with a ratio of 4.5 per 1,000.

Rich, plump Luxembourg’s national airline is among the worst airlines in Europe when it comes to trusting your luggage. Heavily subsidised Air Malta shares the enviable position of being the carrier with least lost luggage over the past year. Of course Air Malta is a crucial link in the business of giving travellers a pleasant problem free ride when they visit Malta. Whether Luxair has the customer in mind is another matter altogether. And we have not even started on the prices yet.