9100 unsustainable low cost flights ?

nothing to do with Ryan air's commercial policies or the price of fuel for aircraft this is more structural.The president of the Regione Puglia has just published the figures (i believe it's the first to do this in Italy,probably the others will be forced to follow and will unleash quite a lot of bad feeling ,pressures and could compromise the entire situation for low cost flights in the country)
It appears that Puglia PAY low cost airlines 120.000.000 euro to low cost airlines to fly into Bari and Brindisi.!!!!!!!!!!!
This could be in some sort of contravention to E.U. free market legislation .
Basically it implies that the state thru it's regional governments has been financing these air connections which in turn implies that they would otherwise be unsustainable(?)
As a tax payer i can certainly object to this sort of occult financing of private companies.
It will be "interesting" to see how all this develops and what the foreseeable consequences could be.

Category
Travel & Holiday Advice

Submitted by Anonymous (not verified) on Fri, 03/21/2008 - 09:39

Yes indeed, the EU is on their case. Ryanair currently have a long-running dispute with them about Charleroi airport which was raised, I think, by Air France and Lufthansa claiming that the region was unfairly subsidising Ryanair. They in turn, claim that the practice is in line with the normal activities of regional governments who wish to attract business and employers and that they bring a net benefit economically, which far outweighs the 'subsidy'. They contend that the subsidy is not for a particular airline, but for any airline which chooses to fly into the airport; the fact is that Air France and Lufthansa simply don't wish to fly to Charleroi. Of course, Ryanair put their side of the case with a great many more expletives than that!

Submitted by Anonymous (not verified) on Fri, 03/21/2008 - 12:26

This "subsidising" occurs not only in Italy. In other countries there has been similar claims; however, it should be pointed out that low cost companies help enormously in the promotion of areas which have been overlooked by other carriers. This, in turn, creates both business opportunities and development, which then helps local government to raise more revenue. So we should look at it as an investment. Anyway, up to now the other airlines were never interested in starting flights to areas which were not previously successful in the number of passengers they attracted. So....

Submitted by Anonymous (not verified) on Fri, 03/21/2008 - 13:05

The problem with the handouts is the competive [and often blackmail] enviroment they often create. Airlines will threaten to pull out if they don't get a new higher hand out because the airport in the next region over has just made a pitch.

I also wonder how else the money could be used to create new businesses. Why not give the 120 million to the local team. If they win enough games you'll have flocks of tourists coming to watch. In some ways it makes more sense then giving money to airlines so they can run empty flights or even full cut rate flights.