Why privatisation sucks!

[Alatar]

Aer Lingus, the National Airline which was previously State owned and is now privatised has just announced that they are pulling out of the Shannon-Heathrow route in order to maximise profits by flying from Aldergrove in Belfast instead.

What this means is that all the businesses in the West of Ireland, from Kerry, Cork, Limerick, Galway, Mayo and many of the inland counties have just lost their gateway to the rest of the world. Unless another carrier, who conveniently has precious landing slots at Heathrow chooses to come in and take up the route, the ramifications for Business and Tourism in the West of Ireland will be catastrophic. Long term we'll be looking at unemployment and drops in housing values.

Aer Lingus built their business as the Gateway to Europe, by using Shannon as a refuelling stop when long haul flights were incapable of getting further. The valuable Heathrow landing slots were earned by the State Run company over 30 years, and now they're basically being peddled to the highest bidder. The route was profitable, just not as profitable as Belfast will be. As a business, Aer Lingus are probably making a smart move. As the National airline, they have sold out disgracefully.

Thank God for Michael O'Leary and Ryan Air.

[solicitr]

Thank God for Michael O'Leary and Ryan Air

Which is, if I'm not mistaken, private........

[Alatar]

There's a huge difference. He built his business from the ground up, not like Aer Lingus which was built using taxpayers money.

I have no problem with private businesses. I do have a problem with privatisation of State funded businesses.

[vison]

Yes, indeed, so do I.

Canada is a big place and it is hard to do business without flying from city to city. We have Air Canada, which is our "national airline" and has always been heavily supported and subsidized by the government. There are periodic efforts to have the thing make money, the last one consisted of erasing all the debt and then "privatizing" it. Air Canada has swallowed up several other carriers who could not compete with such tactics.

Now we have WestJet, also, a money-making concern built from the ground up. I fly WestJet when I can.

As for American airlines, well, anyone who is naive enough to think they are all "free enterprise" is, um, naive.

[solicitr]

As for American airlines, well, anyone who is naive enough to think they are all "free enterprise" is, um, naive

Quite so- but I note that the cozy old cartel with its hidden subsidies, the major carriers, have been having their lunch eaten by the entrepeneurial discounters, ever since the majors had thir monopoly on landing rights rescinded.

What I am waiting to see is to what extent Lufthansa and Air France will be putting in orders to shore up the flagging A380 program, actual utility be damned. Besides the obvious financial interest of the governments concerned, national carriers have a fatal attraction to prestige projects: and it appears, with the advent of long-range midsize jets and the demise of hub-and-spoke systems, that the A380 may well become the new Concorde.

[vison]

As for American airlines, well, anyone who is naive enough to think they are all "free enterprise" is, um, naive

Quite so- but I note that the cozy old cartel with its hidden subsidies, the major carriers, have been having their lunch eaten by the entrepeneurial discounters, ever since the majors had thir monopoly on landing rights rescinded.

What I am waiting to see is to what extent Lufthansa and Air France will be putting in orders to shore up the flagging A380 program, actual utility be damned. Besides the obvious financial interest of the governments concerned, national carriers have a fatal attraction to prestige projects: and it appears, with the advent of long-range midsize jets and the demise of hub-and-spoke systems, that the A380 may well become the new Concorde.

Very true. It's beyond me why "nations" seem to fall for this kind of stupidity.

On the other hand, it is curious to consider what Boeing and Douglas would do without the US military. I'm not being sarcastic, of course it is only logical that the military needs planes, etc., but the system is riddled with corruption and pork-barreling. They all are, all over the world. How nice it would be if real entrepeneurs could develop systems without having to depend on the massive amounts of money the various militaries have to spend.

I ain't flyin' on no A380, I can tell you that. Give me the dear old 747 any time, even though many of them are ancient. Every pilot I know of thinks the 747 is the best plane ever built with the possible exception of the DC3.

[Primula Baggins]

Re: the 747: My brother once published a children's book about "How to Fly a 747" or some such, which involved him getting to go to Boeing and spend a whole night flying a 747 simulator. He came away with very much the same feeling about that plane: it was engineered to do things planes are not supposed to be able to do without coming apart. Which is what you want in an emergency.

This was in the early '90s. One chilling note: my brother's most exciting experience that night was flying the 747 between the towers of the World Trade Center. He had to tilt the plane to get the wings through. :| (That bit didn't make it into the book!)

[axordil]

On the other hand, it is curious to consider what Boeing and Douglas would do without the US military.

Well, it's actually all Boeing now, since they bought McDonnell Douglas a while back. But it's still a valid question. I would say that the "subsidy" provided by the military is more of a fallback for the otherwise cyclical airliner business.

[Inanna]

I ain't flyin' on no A380, I can tell you that. Give me the dear old 747 any time, even though many of them are ancient. Every pilot I know of thinks the 747 is the best plane ever built with the possible exception of the DC3.

But these pilots have not flown the A380, have they? So you can't conclude that A380 is not a better aircraft than the 747. It might be, it might not be. And Airbus planes have their advantages - they fly higher than Boeing aircrafts and are therefore more fuel efficient. And the A380 might make cross-Atlantic flying more affordable.

Boeing has often pointed fingers at Airbus for the government's financial support. Airbus has pointed back at Boeing's military program and the profits they achieve from those. And it goes around.

Am not sure Lufthansa and Air France will be able to put in more orders for the A380. It could be suicidal.

[solicitr]

they fly higher than Boeing aircrafts and are therefore more fuel efficient.

Not more than the 787 Dreamliner- quite the reverse.

[TheEllipticalDisillusion]

Aren't there less airstreams for the planes to hitch a ride with as you go higher into the atmosphere? If there are, you may need more or an equal amount of fuel to make the same flight. All speculation on my part.

[truehobbit]

Aer Lingus, the National Airline which was previously State owned and is now privatised has just announced that they are pulling out of the Shannon-Heathrow route in order to maximise profits by flying from Aldergrove in Belfast instead.

What this means is that all the businesses in the West of Ireland, from Kerry, Cork, Limerick, Galway, Mayo and many of the inland counties have just lost their gateway to the rest of the world. Unless another carrier, who conveniently has precious landing slots at Heathrow chooses to come in and take up the route, the ramifications for Business and Tourism in the West of Ireland will be catastrophic. Long term we'll be looking at unemployment and drops in housing values.

Aer Lingus built their business as the Gateway to Europe, by using Shannon as a refuelling stop when long haul flights were incapable of getting further. The valuable Heathrow landing slots were earned by the State Run company over 30 years, and now they're basically being peddled to the highest bidder. The route was profitable, just not as profitable as Belfast will be. As a business, Aer Lingus are probably making a smart move. As the National airline, they have sold out disgracefully.

Thank God for Michael O'Leary and Ryan Air.

There's no way RyanAir will ever start flying into Heathrow, so I don't see what's to be thankful about in this case.
I do regret this move on the part of AerLingus, though. They seem to be a decent airline, and if I could choose between booking them or RyanAir for a trip, it would be the former hands down.

Big companies making suicidal moves seems to be all the rage right now, be it in taking larger bites than they can swallow or in trying to maximise profits in ways that anyone who can do simple sums realises to be doomed.

German Rail is planning privatisation, too, and the effect is exactly what you mention about AerLingus, maximisation of profit to come before getting their job done.
As a state-run provider of public transport they have to fulfill a certain mission. They have to provide service to enable people to get from one place to another. At times, that might mean serving connections that are not the most profitable.
Privatisation means this mission is discarded.

And, just as AerLingus seems to be putting its most valuable possession (the slots at Heathrow) up for sale, German Rail is about to sell part of its (tax-built) network for something like a tenth of what it's worth. A majority in the council who had to agree to this apparently thought this was a great idea.

Oh, and, btw, those who know the British railway system a bit will appreciate the irony - the rail privatisation in Britain is the role-model here.

[Alatar]

There's no way RyanAir will ever start flying into Heathrow, so I don't see what's to be thankful about in this case.

Well, quite simply, without Ryanair we would have no access to London at all. Certainly, Heathrow is the International hub, and the more useful, but at least I can still fly to London with Ryanair.

Latest news is that Cityjet are looking at offering a service from Shannon to Paris. DeGaulle is an even better International hub than Heathrow and is primed for expansion, so maybe we'll end up better off.

[ToshoftheWuffingas]

Wot Hobbi sed.
Much of the nationalised industries were sold off by Thatcher and her neo-con friends to their friends in finance for knock-down prices in the 80's and early 90's. The proceeds were used to give tax-cuts immediately before the next election. It still sticks in the gullet of many of us that our own belongings were sold off in such a manner.
Some industries were run better, many were run a lot worse, including the water utilities and the national rail network.

And I am about to book my first flight on Ryan Air. Wish me luck.

[solicitr]

Oh, and, btw, those who know the British railway system a bit will appreciate the irony - the rail privatisation in Britain is the role-model here.

Some industries were run better, many were run a lot worse, including the water utilities and the national rail network.

The fundamental errors made by the privatisers was that they read the memo down as far as 'private,' but never made it to the 'competition' part. Private monopolies are even worse than government monopolies, yet that's what British Rail's fragments are, as is BAA.

It's a shame to see the superb Deutsche Bundesbahn going the same way- although IIRC it was only able to maintain its fabulous service in the past through heavy operating losses and taxpayer subsidies.

[truehobbit]

Tosh, good luck! Where are you heading?
And, remember, it's RyanAir's policy to try to find reasons not to take people on board. So, be on time, read all the smallprint, don't give them a handle!

solicitr, I think you are correct that the Bundesbahn is heavily subsidised, but if that helps to maintain connections that would be unprofitable for a free market enterprise, I'm ok with that. The problem is that in spite of subsidies they have recently been cutting services while raising prices, so there seems to be something wrong with the management in general. I think that privatisation is seen as the magic word to conjure all those problems away. I wonder whether a private and competitive system would succeed in providing efficient, affordable service - is there any such system anywhere, to your knowledge?

[Crucifer]

With Ryanair, don't lose your boarding card! You need it to get off the plane!

True!

[Frelga]

what happens if you lose it? Can you ever get off?

[Crucifer]

You have to have ticket information.

Seriously. A boarding card! You'd think you'd only need that to board, but no, ryanair won't let you into the country without it.

[Alatar]

Actually Crucifer, in my experience Ryanair don't give a damn once you're off the plane. Its the airport authorities who look for it. Never figured out why though....