RYANAIR’S decision to all but pull out of Manchester Airport is no surprise.
The surprise is the no-frills airline chose to operate from there in the first place. Manchester has always been an expensive airport for airlines.
Airports like to keep their landing fees a closely guarded secret, but they do leak out from time to time.
Manchester charges in excess of £10 per passenger, while Liverpool John Lennon, the natural home of cheap flights, is nearer £2.
In some senses, it’s a formula that has worked for Liverpool. In another sense, though, it hasn’t worked.
Over the past 10 years, the increase in both Ryanair and Easyjet services has produced a ten-fold increase in passenger numbers. The fact that Ryanair has decided to reshuffle services away from Manchester to Liverpool suggests that the company’s business analysts have crunched their figures and found that the best place to be in a recession is the cheaper airport. It shows the resilience of the cheap landing fees model.
But there is another side to this coin. If an airport is not going to charge airlines big landing fees, then it’s going to have to make its money from retail rents. That’s not so certain in difficult economic times. As a result, Liverpool John Lennon Airport has yet to make a worthwhile profit for its owner, Peel Holdings.
And it’s not as if Liverpool has had a painless recession. Passenger numbers are down this year.
This fact alone means nothing should be taken for granted. That’s why talk of strike action at the airport can only backfire. Who would book tickets for a flight from an airport which has a reputation for cancelled flights or delayed or lost baggage? Strike action has the very real danger of backfiring on those taking it, if customers take longer-term decisions to stay away.
THE past week has seen three big industrial countries publish official figures which show they have come out of recession.
This is excellent news.
While Germany, France and Japan all went into recession ahead of Britain, the hope has to be that we won’t be far behind in coming out of it.
Signs that worldwide economic activity is picking up again can be seen in Pilkington owner Nippon Sheet Glass’s latest quarterly results.
The Japanese company is seeing some stability in demand for its glass, used in buildings and for car windscreens. Both the construction and automotive sectors have suffered hugely in the past year or two. If things are stabilising in these two hard-hit areas, then there is real hope for the rest of us.
Yet we are far from out of the woods. The Bank of England is predicting that it will take years before economic output recovers to its pre- recessionary levels. Unemployment will rise and remain high for many years after economic growth returns to the UK. Uncertainty and the feel bad factor are bound to stay with us for some time to come.
And yet the twist in the tale could yet be that this recession, and the concerted global response to it, is so unlike those that went before that the dynamics of recovery could be every bit as surprising as the dynamics of the decline. Maybe, just maybe, recovery can be faster than we expect.
A crucial factor will be bank lending activity.
