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Discussion in 'Virgin Atlantic | Flying Club' started by uggboy, Mar 20, 2015.
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Virgin Atlantic warns proposed Aer Lingus deal would result in fare increases
Not all potential EI takeovers portend equal market implications....
A takeover by Willie Walsh will certainly reduce choice and increase fares. We all know how the Nigels operate.
A takeover by King Leprechaun will certainly reduce choice but is also likely to reduce fares.
Notice how Branson carefully defined the relevant market; customers going via UK for onward connections.
That's a limited market. It ignores point to point traffic, on which there is healthy competition from Ryanair and others. As for connecting traffic, the true competition analogue is the market for all carriers offering connections from DUB, which is equally as healthy.
So you are left with the complaint of a man whose airline tried - but failed - to run a domestic feeder operation in the UK (note he didn't bother with Eire and NI at all). Puts it in context just a little.
VS Little Red is entirely wetleased from IE, so it could hardly have operated services to Eire and NI in competition with IE.
If IE is bought by IAG there will be no point to point competition from LHR.
The wet lease option was taken by VS it wasn't pre-ordained. The fact that the choice was made indicated that VS were not interested in the Irish market. Indeed, before the acquisition of BD, neither was BA.
Of course the EI acquisition would reduce competition on the LHR Ireland routes. In that respect it will fall into line with the other domestic destinations BA serves from Heathrow, but my point is "so what?" Defining the market as p2p traffic to/from LHR is not particularly relevant given the strong competitive presence to 4 other London airports. Indeed, competition between these airports is of key importance in the market place.
If the relevant market is connecting traffic, then the true market is all carriers offering connections from the Irish market. There are plenty. You only need to look at the recent low fares on BA ex-DUB to get a feel for the competitive environment.