Minister pledges to act over costly air fares
Ryan TaylorThe Scottish government’s transport minister has pledged to meet Loganair chiefs to find ways of driving down the high cost of air fares.
Derek Mackay’s call for talks with the operator follows an online campaign launched earlier this year, which gathered over 7,500 followers in less than 48 hours. Campaigner Scott Preston created the Islanders against Flybe & Loganair’s excessive prices Facebook page after becoming exasperated by the cost of air travel.
During a visit today the minister said he wanted to know what the operator could do to help cash-strapped passengers who have had to stump up cash for high air fares.
He also wants to know how reliability could be improved.
Mr Mackay’s flights both to and from the isles were delayed – at least one because of technical difficulties.
“I’ve met the campaigners and I’ve met elected members and next I’ll meet the operator to see what can be done to tackle air fares, and also reliability in the air service itself to make sure it’s more reliable.”
He said the Scottish government was committed to the current air discount scheme [ADS] of 40 per cent.
“I think it [ADS] is well received, the scheme for residents, but I’d want to know what the operator is willing to do in terms of reducing fares, or certainly freezing them, and that’s a conversation I’ll be having.”
Mr Mackay was speaking after the announcement of a comprehensive study of the ferry service to and from Orkney and Shetland, which will help inform the tender process for the next contract due to begin in April 2018.
His comments followed a meeting with councillors and officials on transport and a range of other issues, including housing, the economy, rural affairs and fishing.
He spoke about the prospect of a new Islands Bill, which he said would be “empowering” and reflect a move away from “one size fits all” legislation.
“I think all of that was well received, and follows on from the Empowering Our Island Communities Action Plan I’ve been working on ever since the formation of the Islands Area Ministerial Working Group.”
That development was welcomed by the council’s political leader, Gary Robinson.
“I’m particularly interested in taking forward our discussions on the forthcoming Islands Bill, ahead of the formal consultation period,” said Mr Robinson.
“The consultation will offer islanders a real opportunity to shape the legislation in order to secure the best social and economic benefits for Shetland.”
But it was the future of the ferry service, and the new study, which occupied much of the minister’s time.
The Scottish government says the study, in line with Scottish Transport Appraisal Guidance (Stag), will be overseen by a working group led by Transport Scotland and including representatives from the SIC and Orkney council as well as ZetTrans, HiTrans and Highlands and Islands Enterprise.
The process will also involve detailed engagement with main stakeholders, such as the haulage industry and relevant harbour authorities.
The study is expected to get under way this summer and be completed in time to inform the early stages of the procurement for the next contract.
“It’s a comprehensive study … which essentially looks at the options, the routes, timetabling, demand for service and capacity,” said Mr Mackay.
“It engages widely with communities and passengers and then brings it all together.
“It’s the most comprehensive exercise there can be when it comes to a transport issue. It will be pulled together and will then inform ministers … local authorities, in terms of what should be procured. As we approach that procurement, we’ll have all that information.
“That’s more engagement, more consultation, than was the case before. That puts us in a good place to make sure we get the contract right, the specification right, for what, essentially, we buy for the next term.”
Full story in this week’s Shetland Times.
Robin Stevenson
With the tendering process coming up for revue in 2018 I’m pretty confident that Derek MacKay can strike a far better deal with Loganair, the 40% Air discount Scheme [ADS] is pretty substantial and therefore the onus should be on Loganair to reduce their overpricing, failing to do so could mean the loss of their contract.
The argument over too few people travelling to Shetland by air makes the prices far higher is questionable, when we consider IF the prices were much cheaper many more visitors could afford to make the journey. More visitors, more business.
Ali Inkster
More free beer tomorrow.
Robin Stevenson
“More free beer tomorrow”.
I’m afraid not Ali, but considerably less than what you’re paying at the moment I’d imagine. 😀
Ali Inkster
Why not now? Why not the last time it came up or the time before that? Why is it always the next time after the election? If we vote SSnp of course.
Gareth Fair
Robin,
Can you explain how the tendering process for the Ferry Contract in 2018 is going to help Derek MacKay negotiate with Loganair?
Robin Stevenson
Gareth
I don’t really understand your question? What has the “ferry contract” in 2018 got to do with getting a better deal from Loganair?
Gareth Fair
Robin,
My point exactly.
There is no tendering process with airlines, they own the planes and the routes.
While you may see this as an SNP point scoring opportunity, I think it would be better left to someone who understands how it works.
Or at the very least try reading the article properly.
Ali Inkster
You tell us Wrobin it was you that connected the two, “With the tendering process coming up for revue in 2018 I’m pretty confident that Derek MacKay can strike a far better deal with Loganair, “
Chris Johnston
“IF the prices were much cheaper many more visitors could afford to make the journey. More visitors, more business.”
Are the owners of Loganair to put themselves at increased risk by flying more passengers for less money per passenger so Shetland will have an opportunity for more business? What is the incentive for Loganair, absent an increased government subsidy? Do you also propose an increased government subsidy for NorthLink to decrease ferry fares? Will Shetland pay these increased subsidies, or some government body other than Shetland?
Shetland has learned the truth of Margaret Thatcher’s saying, “The problem with socialism is that you eventually run out of other people’s money.”
Robin Stevenson
Chris
Why on earth would loganair “put themselves at increased risk by flying more passengers for less money per passenger so Shetland will have an opportunity for more business?”
Where’s the risk?…. By being busier?….The incentive for Loganair would be exactly the same incentive for ANY airline, more passengers = more flights = more money.
This isn’t about increasing the SGs 40% ADS [air discount scheme] This is about Loganair’s business acumen.
To put it another way, why would a restaurant owner prefer to have one sitting per day serving 10 people at £50 per head, when the restaurant round the corner is serving 50 people 3 times a day at £20 per head?
So, no, I don’t propose a further increased government subsidy, I propose getting the best deal for both air and sea travel to and from Shetland, which has to be thrashed out between Derek MacKay and whichever firms have the contracts.
If that’s Thatcher’s words of wisdom then I think I’ll stick with the alternative “The problem with capitalism is capitalists eventually run out of your money”.
Ali Inkster
With an £80 million per annum surplus from direct taxation we could more than afford to pay for it with our own money. If we were allowed to keep it that is.
Gareth Fair
Robin,
You say ‘Where’s the risk?…. By being busier?….The incentive for Loganair would be exactly the same incentive for ANY airline, more passengers = more flights = more money.’
Can we assume you have carefully modelled the price elasticity of demand taking into account the huge cost of buying, maintaining and running additional airplanes?
Have you looked into seasonal demand and the effect of the current and future oil price on demand on such a large investment?
Perhaps you were planning on hiring them? You can get a SAAB 340 (37 seater) for £8500 per hour?
That’s £229.73 per passenger per hour if it’s full, plus ground staff and other costs?
Are there additional landing slots available?
Have you considered the environmental impact?
Can we see some of the analysis that backs up this assertion or is it nonsense again?
I think it is important for us to understand how such business related statements are thought through by the SNP.
As for you restaurant example it would depend on how much additional staff, energy and food costs were incurred with the 40 extra covers, they may be worse off.
Robin Stevenson
Gareth
I don’t speak for the SNP [despite what you seem to imagine]
I didn’t “carefully model” anything, I simply threw out a possible scenario, one of which, you obviously disagree with, which is fine and have every right to. However, rather than constructively offer your own vision, you simply adopted the usual mantra “you can’t do that”. therefore the conversation is dead before it even starts.
Naturally, further flights are dependent on supply and demand, IF there is a demand then that supply should be met, I don’t remember mentioning anything about renting another aircraft, did you just throw that bit in yourself?
When we consider your comment of my other possible restaurant scenario, again, your response is, depressingly negative, “they may be worse off”, Yes they may. OR, it maybe the best thing they ever did?….Glass half full and all that.
What an utterly depressing outlook you seem to have, “don’t do anything at all because it might all go wrong”……Really?
Gareth Fair
Robin,
Nothing to do with any ‘utterly depressing outlook’, I’m merely trying to inject some common sense into your naive, simplistic view on everything.
That’s how a discussion works, you state something I disagree with it, I point out why I think that.
I’m allowed to disagree with you and vise versa.
That ‘depressing’ tactic won’t work on me, you use that a lot, anyone who points out serious flaws in your thinking is being ‘negative’ or has a ‘depressing outlook’. That’s just the last ditch effort of someone who has lost a debate.
If you put a bit more thought and reason into your campaigning I may well agree with you.
Do the Airline Executives have an ‘utterly depressing outlook?’
They do not seem to agree with your ‘business advice’ or they would have implemented it already. You can be sure they have looked at price, demand and profit very closely.
Chris Johnston
Robin, you wrote, “Where’s the risk?…. By being busier?….”
Being busier without a corresponding increase in profits is a risk. If Loganair were to reduce prices and increase the number of passengers as you suggest, they might make less or no profit. They must make a profit to remain in business and offer their service. Let’s suppose they drop prices 20% and double the number of flights and passengers. Their income would increase by 60%, but their fuel costs and airport fees and labor costs would double, and they might well need another aircraft. All airlines closely manage number of flights to ticket demand, so Loganair is not alone.
““The problem with capitalism is capitalists eventually run out of your money”.
I’m rolling in the floor laughing. Please open your Economics 101 textbook and refresh your memory. Capitalism creates jobs and money, unlike government and socialism.
Brian Smith
Yes, the Great Depression was a real money-spinner er
Gareth Fair
““The problem with capitalism is capitalists eventually run out of your money”.
I’m rolling in the floor laughing. Please open your Economics 101 textbook and refresh your memory. Capitalism creates jobs and money, unlike government and socialism.
Same here Colin, although once I finally finished laughing the utter despair that this comes from the people running Scotland set in.
Gareth Fair
Sorry, should read Chris.
Robin Stevenson
Chris
You’re more or less talking much in the same vein as Gareth, to be honest, a couple of “Doomsayers”, “it Might all fail, maybe, less or NO profit”, …. I’m just surprised that – as you both advocate capitalism – you both seem terrified to even “Attempt” anything that could be perceived as profit making, without a great deal of risk? [imo] You have managed to successfully talk yourself out of even discussing it. [progress indeed]
The capitalist Vs Socialist argument will not be sorted out on this forum, however, let me ask you both a simple question:
You find yourself stranded on a desert island with one other person with no means to get off.
Would you prefer this other person to be a socialist or a capitalist? 🙂
Gareth Fair
Robin,
You are at it again with your ‘negative’ tactic.
If you can’t handle critique of your often senseless and poorly thought through statements, don’t publish them on a public discussion forum.
Having worked in Business Analysis and Project Management, (including lead Project Manager using Prince 2) I would not consider myself as someone who is ‘terrified to even “Attempt” anything’, quite the reverse. I would however ‘prefer’ projects to stand some hope of being successful.
In Project Management there is a great deal of effort put into the focus on business justification throughout the entire project, including post project.
This is not people being “Doomsayers” it is sensible, it is a good thing.
Ignoring this process is foolish.
You ask “where’s the risk?”, that’s what we are trying to explain to you.
Robin Stevenson
Gareth
So what I believe you’re trying to say here is, “Don’t discuss Loganairs [possible] improved service offering more flights for less money, unless I have a properly costed forecast of exactly what this would entail?” On top of “Don’t throw in [imaginary] scenarios, unless I have a properly costed and precisely detailed analysis of what this would also entail?”
In other words, “Shut up and get back in your box”, I take it?
Brilliant Gareth, you’ve more or less adopted exactly the same stance as our wonderful UK government?
Perhaps you could have a wee word with STs and ask them to change this “discussion forum” to “Only discuss IF you already have all the answers, and don’t dare look for debate forum?”
Ali Inkster
I Don’t Know about you Wrobin but stranded on a desert island with one other person, their political preference would be the last thing on my mind. but each to their own I suppose. 🙂
Gareth Fair
Robin,
Not at all, please discuss away, as someone who actually lives on Shetland lower fares would be good for me.
To recap as I see it;
Your plan to use the tendering process (presumably the one for the ferry service as referred to by Derek MacKay) to negotiate with Loganair, we seem to agree, is a non starter.
You accuse Loganair of over charging (but have no figures) and want to threaten them with the removal of their contract, although it is unclear what contract you are referring to, or they indeed have with the SG.
You don’t propose any increase to the ADS, so that is off the table.
Lowering the prices may increase profit but it is quite complex and may be something Loganair project and pricing team would need to look at if they are not doing so already.
Increasing business may require substantial investment in additional planes and there are questions over landing slots etc.
Anyone who suggests any of the risks you asked them to point out is a “doomsayer”
John Tulloch
Game, set and match to Fair!
Take my advice, Robin, stick with the social media pages like Yes Shetland, they block anyone who argues with them down there – you’re out of your depth in the Shetland Times.
James Watt
John, as someone who’s had to have COSLA explained to him on more than one occasion yet still fails to understand what COSLA does. You probably aren’t the best person to comment on who’s out of their depth and who should or shouldn’t post on this site.
John Tulloch
@James Watt: Oh yes, COSLA’s the crowd the SNP put in charge (2008) of distributing Scottish councils’ annual grant funding from government.
They distribute education funding on a “per pupil”, as opposed to a “needs” basis, resulting in a £10mpa shortfall in the SIC’s education funding, versus actual costs – AFTER SIC cut spending 20 percent!
A shortfall which must be made up by raiding Shetland’s oil reserves.
And John Swinney agreed, only last year, to COSLA continuing to fund councils on that basis – I suppose it wouldn’t have done to have had a fight with COSLA, just before the referendum?
Or before the Holyrood elections in 2016?
Or before the Scottish council elections in 2017?
The Scottish government set up this funding scam, they are allowing it to continue and they cannot possibly evade responsibility for the outcome.
James Watt
@ John, I wasn’t expecting you to prove my point so well but you have once again demonstrated how out your depth you are, nearly every post you make is pure conjecture with only fleeting references to facts.
John Tulloch
@James Watt, you write: “@ John, I wasn’t expecting you to prove my point so well …… nearly every post you make is pure conjecture with only fleeting references to facts.”
“…pure conjecture with only fleeting references to facts.”?
I beg to differ. It isn’t conjecture that:
1. The SNP Scottish government (2008) arranged for government funding to be distributed by COSLA; or that:
2. COSLA distribute education funding on a “per pupil” as opposed to a ” needs” basis which hugely favours densely populated areas, at the expense of remote rural ones like Sheland; or that:
3. This results in Shetland’s education being under-funded by £10Mpa, AFTER 20 percent SIC cuts; or that:
4. This funding shortfall must be made good from Shetland’s community wealth funds,mspending capital to fund “daily living”; or that:
5. John Swinney, in full knowledge of the difficulties being experienced by remote councils, last year – seven months before the referendum – agreed that this flat rate funding scam should be allowed to continue.
Not much conjecture among that lot, is there, Mr Watt?
Gareth Fair
Robin,
I apologise unreservedly if you got that impression.
It was a rhetorical question, that is a question asked in order to produce an effect or make a statement rather than elicit information.
In this case it was merely designed to demonstrate the sort of things one would have to consider in order to make such a claim with any degree of authority.
It is in all Shetlanders interests if we get cheaper fares and better service. I would hate to think I was responsible for curtailing any creative genius that would make that happen.
In future if I ask a retorical question I will try to remember to point it out in order to avoid any confusion.
Robin Stevenson
Gareth
In fairness, it is me that has to apologise, I misread the article and now realise that there is only one airline to and from Shetland that seems to have the monopoly [Flybe has held the Loganair franchise partnership since 2008] This – I’d imagine – makes negotiations a little more difficult when we don’t have another airline to compete [as yet]. However, what is interesting is that that Derek MacKay is meeting with the chiefs of Loganair with no mention of Flybe.
You added:
“I would hate to think I was responsible for curtailing any creative genius that would make that happen”.
You’re too kind, I simply don’t deserve such flattery :D…Oh…Wait…were you being sarcastic?
Gareth Fair
Robin,
The apology is sincere.
At the end of the day I don’t have any of the answers and you are just trying to help.