Airport charges, Ryanair reducing Stansted flights

Big news yesterday was Ryanair announcing that they will reduce their flights from Stansted by 40% because of the various charges that make it much less attractive for them to operate from there. Instead, they apparently want to focus their efforts on overseas traffic where their business model is better suited, or rather, where airports and governments suit their business model better.

I am no great fan of Ryanair, but I do use them frequently, so I guess I am a good customer at least, and I have a lot of sympathy in this instance with their arguments. Flight taxes in the UK are much higher, but also airports charge very high fees to both customers and airlines.

I could rant all day about the ludicrous parking fees at Stansted and other London airports, but everyone knows from their own experience already. I could also rant about the apparently incompetent management that has taken a year to get a payment booth operating from when the 'open shortly' sign appeared, that redesigned the car parks to make them as irritating as possible, that can't operate security with anything remotely resembling competence, but you get the point.

Although it wouldn't help taxes, introducing competition at airports would certainly help abuses of customers and airlines. Runways are in short supply, but there is no reason why terminals couldn't be in competition. If BAA was forced to sell parts of its airports rather than entire airports, then different companies could operate alongside. It would even be possible to organise it so that a flight could accept passengers from either terminal, so that true choice would exist. I would be able to choose to pay high car park fees, take ages in security, and have end to end frustration, or to go to a different terminal run by a good company, where the end to end experience is both pleasant and cost effective. In such a competitive market, standards would inevitably improve.

It is so obvious that this is possible to organise, that it really begs the question why BAA was given local monopolies in the first place. Living where we do, of course there is only one international airport close by. I use the further away ones not by choice, but only when there is no suitable flight locally. That is not true competition, it is just a local monopoly system just like rail travel and it simply doesn't work as a good business model for private competitive enterprise. It encourages bad management, poor customer service, and eventually wholesale monopolistic abuse of the customer.

If Stansted can still manage to win its expansion debate, then it should be forced to open a new terminal operated by a different company, with its own car parks, and its own charging. Regulators should ensure that a simple cartel doesn't operate where both termianls agree to ignore customer interests to both get rich quick. Then we can move on.

By firing a shot over the bows, Ryanair has highlighted the high fees, and Stansted arrogantly dismissed it as unimportant in spite of the high fraction of flights that Ryanair represents. This shows that the existing management is both managerially incompetent and determined to continue its ripoff strategy. Regulators have a responsibility to ensure that the customer's interests are protected. So far they have failed in that role, but expansion would be a perfect opportunity to take control, and to break up the airport monopolies that have been so badly abused.