Piling on flights to maintain market share is unsustainable, says Sunvil chairman Noel Josephides
I bought my first car at an auction in 1966. It cost £60 and was a red Austin Mk I Mini in debatable condition. I was conned.
I sprayed the bonnet black, as was the fashion then, and fitted a straight-through exhaust which made a lot of noise but didn’t improve performance. I spent more time repairing the car than driving it.
On the back was a circular EU sticker with the exciting words Europe Unie. The 60s generation considered the world their oyster. European friends and contacts were exciting developments. We were introduced to wine, croissants, Gauloises cigarettes, French cheeses and Italian food. The 60s took us out of our shell – we went international and aspired to be part of a heady mix of cultures.
I have little faith in the Brexit agreement reached with Europe. It’s difficult to know what to believe anyway, as we are spun a mixture of half‑truths. I’m sure that in 10‑20 years’ time, nothing much will have changed. We may be a little better or a little worse off, but the change will not be noticeable. Perhaps we will look back and ponder whether it was worth the hassle and the billions it has cost to make the change.
But what hurts and depresses me is the abandonment of the Erasmus EU student exchange programme. It signals a withdrawal from the world outside the narrow borders of the UK – why?
Insular mentality
What a time to revert to an insular mentality; what a shame for today’s youth and for their education. Will our children and grandchildren be able to work abroad? Will European youth still readily come to the UK to temporarily serve in our restaurants and hotels as part of their education? Will we attract talented youth to the UK as we once did?
Anyway, here we are, waiting for the vaccine and wondering what January will bring in the way of bookings. Surely, there must be some business to be had or we will collectively run out of cash.
Unless we are allowed to trade, no number of furloughs or RCNs or loans or grants will save us from the inevitable. But the government does not seem to listen, understand or care.
I am also pulled in different directions. Yes, we need bookings and to trade. But do we want to return to the overcapacity and overtourism of 2019? So much depends on our market leaders.
Ridiculous prices
Sunvil, certainly, will be a smaller, more focused company. But reading the trade press fills me with a sense of foreboding. On December 28, Ryanair was offering one million seats at £19.99. On January 1, it had 10,000 seats on sale at £9.99. The airline has ordered 210 Boeing MAX-8200 aircraft. These may be more efficient, but the resultant increase in capacity will negate increased aircraft efficiency.
Jet2 states it wants to return to the ‘old normal’. It is piling on capacity, as is Wizz Air. Surely it is unsustainable to continue to sell flights at ridiculous prices?
The trouble is that nobody wants to lose market share. Ryanair, Tui, Jet2, easyJet and British Airways are fierce competitors – therein lies the problem of balancing supply with demand and reducing carbon emissions.
Traditionally, our industry has operated a ‘slash and burn’ approach to trading. That has to stop. If the UK and European governments really want to meet their emissions targets, they have to exert control over capacity. The free market, left to its own devices, will never achieve a sensible balance.
How much actual capacity will be flown in 2021? On the one hand, there is talk of continued growth; on the other, many flights are being cancelled already.
How full, really, are the 2021 flight schedules of our market leaders? When will demand really kick in? And, if it isn’t until spring following the vaccination programme, how much capacity will be cancelled and how much dumped at ridiculous prices, aborting efforts to reduce carbon emissions?
