Only months ago Ryanair CEO Michael O'Leary was bragging about how his company would be the only cheapo airline in business in a couple of years. Or maybe not: Ryanair axes thousands of flights from Stansted due to soaring fuel costs and airport fees.
Budget airline Ryanair is to axe one in seven of its flights from a major UK holiday airport following a row over cash with controversial 'monopoly' airport operator BAA.
The no-frills carrier announced today that it would making a 14 per cent reduction in the number of weekly flights from 'too expensive' Stansted in Essex for winter 2008-09.
Ryanair will cut the number of planes based at Stansted from 36 to 28 and said it was also closing operations at seven of its European bases from November 4 to December 19 - at Basel, Budapest, Palma in Majorca, Krakow and Rzeszow in Poland, Salzburg and Valencia.
It comes amid fears that the deepening economic gloom will force cash-strapped families to abandon plans for a now almost traditional 'winter sun' break.
Axing the flights will lead to 900 job losses at Stansted, including 150 of its own staff, said Ryanair.
NZ property investor Bob Jones once talked about why he resisted lowering rents for companies when times were tough, his point was that if the difference in rent was what it took to keep a company afloat, its business was dead.
The reality is that Ryanair may have hedged for the current situation, but its customers were people for whom the £10, or £30 airfare was all they could afford and when rising housing, food and fuel costs have eaten even 10% of that airfare, Ryanair loses 100% of the business.
And its not just the very bottom of the heap that is having hassles, I had this yesterday from my cousin Pete in the UK who is well in the middle class.
... desperately trying to arrange a holiday but the prices are just horrendous and despite the fact that a lot of the holidays are unbooked and the hotels half empty no-one seems to be accepting reality and dropping their prices.
The problem is that the costs are going nuts for the all the people in the travel chain and they caught between the rock of unsustainable costs and the hard place of falling business. The days of mass air travel are over, and with them the tourism business, time to get a new focus in life.
And its not just the cheapo airlines of course, QANTAS is lining up for a long range fight just to stay in business.
Qantas is set to axe up to 2,000 jobs worldwide as the record price of oil hits world airlines hard.
I saw Alistair Darling, the UK Chancellor of the Exchequer yesterday acknowledging that costs are rising but asking that it not lead to higher wage claims, translation; "please get ready to accept a lower material standard of living".
Anyone paying attention has already started planning for that, but what is demoralising is that our leadership is still not biting the bullet, none of them are saying, "we are all in for tough times, the future is going to be very different from the past and here is how we are going to deal with that and make sure that the weakest don't carry all the cost".
Partly it would be a lie, partly it would undermine the source of their donations before the donors get out of the market and leave it all to the suckers, so we get this gazing over our shoulders stuff.
Unless we have access to the blogs, then we are making plans and taking local action.
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