Belfast shines whilst Shannon whines (redux)…

According to Richard Delevan’s column in last Sunday’s Tribune having an international airport at Shannon is not the boon it once was to the area, and suggests that the area would have been better off lobbying for a datahub to run ‘fat data pipes’ out of. Otherwise, the Shannon project may find itself drifting into the same history books as Valencia Island, which once housed the key telegraph station linking the continents of Europe and America. Though here too, Delevan thinks they may already be too late:

As we reported last month, Hibernia Atlantic …the same company that owns the undersea internet cable connecting Dublin to the world is close to announcing where it will put the next fat pipe connecting the island of Ireland to the world. In Belfast.

Meanwhile, the Limerick Blogger notes that fully 90% of the readers of the Irish Examiner are against the transfer north. Some unions estimate that up to 1000 jobs in the region could be put at risk. But that’s only if the whol Shannon operation were to fall flat on its face after Aer Lingus’ departure. In fact, 80 jobs are at risk, with another 120 coming with the new Belfast hub.

In truth, as Fintan O’Toole pointed out, in yesterday’s Irish Times, the people of Limerick voted for parties that privatised what had been a semi state body:

The people of the broad midwest region voted in their droves for the parties that implemented and supported the privatisation of Aer Lingus. Fianna Fáil took 44 per cent of the vote and half the seats in Clare.

Together, Fianna Fáil and the PDs took 56 per cent in Limerick East; 52 per cent in Limerick West and 48 per cent in Tipperary South. If you include Fine Gael, which declared itself “generally supportive of the partial sale of Aer Lingus in order to give it commercial flexibility”, the endorsement of privatisation in the region was almost total: 80 per cent in Clare, 82 per cent in Limerick East, 92 per cent in Limerick West, 85 per cent in Galway East, 50 per cent in Tipperary North, 67 per cent in Tipperary South, 72 per cent in Longford-Westmeath.

Their horror at discovering that they got what they voted for suggests that most people in the midwest suffered from at least one of two extraordinary delusions. Either there was some part of the word “private” they failed to understand, or, even more bafflingly, they actually believed that the vague assurances of Government Ministers mean something.

Paige Harrison notes that the natural corollary is that it is no longer up to Aer Lingus to provide economic protection for the region. The ending of the historic bilateral Shannon Stopover agreement between the US and the Republic, removes legal obligations on operators to split their use between Dublin and Shannon.

Meanwhile, Michael O’Leary, (to the delight of Sarah Carey) is playing in the background. He clearly doesn’t want a rival Irish operator in Belfast International, when he’s trying to get his first Belfast flights running out of the tiny George Best City Airport:

In a letter to the prime minister, Ryanair chief executive Michael O’Leary called on the government to combine the power of its 25.3 percent holding of Aer Lingus shares with Ryanair’s own 25.2 percent. “You may be assured that Ryanair will support any action taken by your government to encourage Aer Lingus to maintain its existing four flights a day operation between Shannon and London Heathrow.”

Hmmm… As Paige points out: “Michael O’Leary would have done the same thing.” The same thing as Aer Linus that is, were he in the same position. His motive is clear enough. He’s looking after the narrow interests of his own shareholders. It certainly makes commercial sense for him to enlist the help of the Republic’s government by nobbling his corporate rival’s plan to provide him with competition.

But such action on the part of government as shareholders is likely raise some earnest interest in Brussels.

The truth is that 20 years of social partnership agreements, and the rising labour costs of the Tiger economy have created subtle but important differences in the respective economic environments north and south. The result is that southern companies operating in such commodity markets are desperately looking to lower costs and are seeking jurisdictions with less onerous corporate restrictions. In theory at least, this could be just the beginning of a long steady flow north of the border.

One irony is that Aer Lingus’s trade union is lining up against it on the understandable principle of equal pay north and south of the border (would that be net or gross? – ed). In doing so, they risk running one company, which recognises them, out of Belfast to the direct benefit of Ryanair, which doesn’t. Whoever gains the upper hand in this one, Shannon’s legal protections finally run out at the end of March next year. Aer Lingus, or no Aer Lingus!

The company needs a UK hub. The widely touted Birmingham does not carry direct flights to London, and would be a retrograde step. Northern Ireland, does, and it no longer carries the black mark of the Troubles. Belfast International is large, and underused, and has improving public transport routes into Belfast. With Dublin Airport visibly choking at rush hour and holiday times both Northern Irish airports are likely to offer a better service for travellers stretching down the mainline as far Dundalk and Drogheda, where urban populations are thickening.

Limiting Aer Lingus to Shannon would represent a major opportunity cost for the Republic’s former national carrier. Not simply terms of the short term net gain in jobs, but in terms of keeping itself relevant in terms of international air travel. Given the Republic’s Supreme Court’s ruling in favour of Ryanair against the Labour Court, may give some pause for thought too.

Northern Ireland may be in the process of discovering that, in some respects at least, it has a competitive edge over the Republic, regardless of whether Aer Lingus is allowed to relocate to Aldergrove, or not.

Over to you Willie and Mick!!

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  • Aaron S

    Great post Mick. Three points.

    1 – As a frequent traveller through Aldergrove, I don’t see any evidence that the airport is actually fit to cope with any moe traffic. The place seems, and has seemed for a very long time, badly managed when it comes to the bread and butter issue of actually facilitating passengers.

    2 – This is not a UK hub, no matter what Aer Lingus call it. How could it be, when 58 million of the UK population would have to fly there to take a flight! It’s a second Irish hub, in Ireland’s second city, and the talk of a UK hub that could, theoretically, have gone to Birmingham was surely only ever a negotiating tactic.

    3 – “Meanwhile, the Limerick Blogger notes that fully 90% of the readers of the Irish Examiner are against the transfer north.”. No sh*t! A Munster-based paper with a laregly Munster-based readership is against the loss of flights in Munster? Quel surprise!

    If the TDs in Limerick had any sense, they’d be using this opportunity to petition for a high-speed rail link to Dublin. That’d bring much greater benefits to the Shannon area than the continuation of these flights. And there’s about as much change of that happening as there is Aer Lingus changing their minds on this plan.

  • Aaron S

    ahem. “as much chance”, in the last line above.

  • Aaron S

    Final comment from me, I see, now that I’ve read his point, that Richard agrees with my point 2.

    “Belfast is reasserting itself as the second city of a 32-county Irish economy. Like water finding its own level, now that artificial barriers are coming down, business is flowing back in and . . . quicker than expected . . . moving to reintegrate Belfast with the rest of the island of Ireland and the world.”

  • Mick Fealty

    Thanks Aaron. I’m keen to hear how others respond to your three points. Let me offer this:

    1 – it disparately needs redevelopment. Unlike Dublin it has plenty of room to expand. I doubt that will come until there is the kind of committment that Aer Lingus is offering. That said, the space limitations of City, and the expansion of cheap air travel, mean the business should come from somewhere. I would not bet against O’Leary moving straight in there should the Aer Lingus deal fall flat.

    2 I’m agnostic on whether it is one or the other, or indeed both.

    3 Ho hum… what can I say…

  • Cruimh

    Is there any milage in the cross-border aspect to this shift? Would there be any less dismay if Aer Lingus was transferring to another site within the ROI ?

  • Cruimh

    “That said, the space limitations of City, and the expansion of cheap air travel, mean the business should come from somewhere.”

    Do you think cheap air travel will – or even can -continue Mick ? I suspect it’s days are numbered.

  • Good post Mick.

    David Mc Williams has a good artcle on p21 of today’s Indo along much the same lines.

    How the world has changed. Foir the better!

  • slug

    Its a hub, and its in the UK, ergo its a UK hub.

  • páid

    Mick,

    your generosity with the letter t in commitment is balanced by your parsimony in the case of Valentia 😉

  • Mick Fealty

    It was a big post… I apologise and humbly withdraw….

  • Turgon

    Aron S,

    I agree with point 1 about Aldergrove being inadequate.

    Two obvious problems are the reversal of the decision to give the first 20-30 minutes in the short stay car park free. This leads to the “drive by” strategy used by people collecting folk from the terminal causing (to quote the Fat Controller) confunsion and delay. It was clearly an attempt by the airport to make more money.

    Secondly the chaos which is the security screening. This is, in fairness, no worse than Sydneham or most other UK airports. As far as I can see the rules are applied in a haphazard, capricious and random fashion. Many of the staff seem deliberatley surly. I accept they get a lot of grief but when they are being difficult it is relatively unsurprising. In contrast some are genunine and friendly (mainly the older ones). I am also extremely dubious that the new rules (especially those on liquids) have any relevance to security, I have heard that we are the only country in Europe with the liquids rules. A further example why are mobile phones banned in the security area?

    Maybe the whole thing is a conspiracy to save the enviroment by stopping us all flying because it has become so awful.

  • Comrade Stalin

    Sarah Carey is right about O’Leary. That move he just pulled was ingenius, and I bet neither the Aer Lingus management nor the Government thought of it.

    Regarding the issue in general, I think things are being exaggerated. What we have here is a decision that appears to have been taken for sound business reasons. The howls of people who expect the world to owe them a living are sadly predictable. Aer Lingus feel that Belfast is more competitive. That seems to be that.

    Cruimh:

    Do you think cheap air travel will – or even can -continue Mick ? I suspect it’s days are numbered.

    Cruimh, I am inclined to agree with this. Travelling through Birmingham today, and noting the masses of security staff everywhere, the cost of running the airport surely at present must be coming a significant burden. Who is paying for all this ?

    Is aviation fuel tax-exempt in Ireland in the same way that it is in the UK ?

  • Slugger O’Toole Admin

    CS,

    The cost of running an airport, with a lot of distracting (plane delaying) retail outlets, is one thing. Simplified, it would require less staff, and cut unnecessary overheads.

    Air travel looks set to continue to grow. It used to be a luxury, now it is a standard mode of travel.

    Green taxes/fuel price rises could slow down growth, but that relies on McMillan’s famous events, or something more stringent than expected coming out of the post 2012 negotiations.

  • qubol

    CS: “Who is paying for all this?”

    We are, everytime we venture through the retail assault course that is a modern airport. Airport retail is big money and despite all the problems airports faced this year BAA still delivered 127m STG profit in 1st quarter profits. We also have the likes of Liverpool John Lennon offering express security checks at a cost – something we’ll most likely see more of.

  • Comrade Stalin

    I did not consider the very obvious retail angle, the shops are quite obviously subsidising the rest of the airport infrastructure. If you did away with the retail side, those costs would be added onto the air fares. I guess the airlines understand that and as such are prepared to tolerate delaying planes for this reason in some cases.

    Green taxes/fuel price rises could slow down growth

    I don’t accept this. Why should the airlines get a tax cut that other modes of public transport do not ? I do not see the tax on aviation fuel as a green tax, but instead as eliminating a subsidy on an inefficient and not very profitable industry. If the tax-free status is to be retained, then other modes of public transport including trains, buses and taxis should also be able to avail of it.

    qubol, yes I have noticed market economics being introduced so that those willing to pay more will spend less time queuing. I notice the airlines themselves doing that a lot as well, on Easyjet you can now pay an extra amount in order to have first call on the available seats.

  • Lafcadio

    expanding air travel is here to stay (despite the wet dreams of monbiot & co)

    I’d say that there is significant scope for Belfast International to be upgraded and scaled up – it is at the minute small and mediocre, but as Mick says is well-situated for expansion.

    The issues some people above have with airport security are UK-wide, and in fact as a frequent flyer, I can say that while the Belfast Int guys are typical jobsworths, they are actually paragons of speed and efficiency compared with the hell that is any of the London airports at the minute.

    The best Belfast London trip from that point of view is Belfast City to London City – two tiny airports with next to no delays at security, both situated close to the city centre!

  • Forecast

    Blatantly culled from the TravelMole website

    “Ryanair plots winter fares war with Aer Lingus from Dublin

    Ryanair is to challenge Aer Lingus by expanding services from Dublin with six new European routes this winter.

    The no-frills carrier will go head to head with the Irish flag carrier on three of the routes – Budapest, Nice and Prague – while another to Basel will compete with Aer Lingus’s service to Zurich.

    The Polish destinations of Katowice and Szczecin will also be served.

    Frequencies are to be increased on a further 12 routes to the UK and Europe as the carrier aims to deliver an extra one million passengers a year through the airport.

    Ryanair is to base an additional two Boeing 737s in Dublin to bring its fleet at the airport up to 22 aircraft.

    Extra daily flights are planned from Dublin to Birmingham (4 daily), Edinburgh (4 daily) and Manchester (5 daily). Bratislava, Kaunas, Krakow and Riga frequencies are increased to daily flights, as well as extra weekly flights to Bournemouth, Gkansk, Rzeszow, Tenerife and Wroclaw.

    The expansion will bring Ryanair’s total number of routes served year round from Dublin to 81 – almost double the number served by Aer Lingus.

    The airline is releasing one million seats for €10 on its website for travel on flights from Dublin to Britain and Continental Europe from September to December, available until midnight today (Thursday).

    Ryanair deputy CEO Michael Cawley said: “By launching these six new routes, three of which are already served by Aer Lingus, and one of which competes with Aer Lingus’s high fare route to Zurich, means that long-term access between Dublin and these cities has been secured, even if Aer Lingus decides to transfer more aircraft and more services North of the border to Belfast.

    “Ryanair’s new routes will end Aer Lingus’s high fare monopoly on these routes and means that Irish passengers and visitors will no longer have to suffer €200 and €300 air fares from Dublin to Basel, Budapest, Nice and Prague.

    “Our new routes to will provide new gateways and links between Ireland and Poland which have enjoyed such enormous customer support in recent years.

    “With these new routes and additional flights, Ryanair expects to carry a record 10 million passengers through Dublin Airport in 2008.”

  • Mayoman

    Anyone flown Ryanair recently? Its a disaster! Check in takes hours, the check-in clerks are cashiers, bag weighers, councillors to the bewildered, bouncers. The ‘priority boarding’ system is a joke that leads to fracas at the gate. The check-in baggage allowance (that you pay for!) is 15kg and Mr O’Leary feels that 2-year olds are capable of carrying that weight! Choice between Ryanair and the ferry…take the ferry! Its far easier. My worry is that Ryanair’s intervention on any route will mean the loss of an alternative carrier. For me, Ryanair’s slogan should be “for when there’s just no other option.” The most common phrase you’ll hear when using Ryanair: “never again”. End of rant! 🙂

  • Aaron S

    The issues some people above have with airport security are UK-wide, and in fact as a frequent flyer, I can say that while the Belfast Int guys are typical jobsworths, they are actually paragons of speed and efficiency compared with the hell that is any of the London airports at the minute.

    that completely depends on what time of day you fly through Belfast..

  • Turgon

    Aron S,

    My biggest complaint is that the jobsworthness (is that a word) is completely random. Sometimes security people can be sensible and even pleasant; other times utterly silly and then denying that they are intrepting the rules in a totally different manner from the previous time.

    It means that frequent flyers cannot work out what to do to minimise hassel. And before anyone starts I do not think this is a cunning way of preventing terrorists from working out the rules, I think it depends on whether or not the security person is reasonable or not, or is having a bad day.

  • Lafcadio

    I usually travel through Belfast at pretty busy times, and never have to queue more than 10 mins at security.

    even at off-peak times at Gatwick nowadays it’s more like 30 mins, and Stansted and Luton aren’t much better.

    travelling with ryanair is an unpleasant experience, I would only use it as a last resort. never assume it’s the cheapest either, the last few times i’ve flown to dublin aer lingus has either been cheaper or just a little more expensive.