British no-frills airline Go's entry into the Ireland-Scotland market is unlikely to damage low cost rival Ryanair but could hurt Irish state carrier Aer Lingus, analysts said today.
Go's announcement yesterday it will fly between Edinburgh, Glasgow and Dublin from September is expected to trigger a limited price war, but few expect Ryanair to be beaten on its own turf.
"Based on what we have seen on the very competitive London to Glasgow route, we would expect Ryanair to react on two fronts to the new entrant," said Mr Shane Matthews at Dublin's NCB Stockbrokers.
"First the group will slash average fares and secondly it will increase frequency on the route" he added.
Analysts say Go faces a higher load factor - the number of seats it must fill to break even - than Ryanair, and point out that while the Irish carrier owns its fleet of Boeing 737s Go takes the costlier option of leasing its planes.
"It's quite a strange move, why come and take on the strongest, most successful low fares airline in Europe in its own back yard?" said Mr James Forbes, analyst and Dublin's Goodbody stockbrokers.
"If Go comes in and initiates a price war there can only be one winner." He said.
Go, sold by British Airways last month in a management-led buyout, will fly between Dublin and Edinburgh four times each weekday and three times a day between Glasgow International and Dublin.
Ryanair, which has a strategy of flying to cheaper secondary airports, offers three flights a day to Glasgow Prestwick.
"Ryanair has a significant cost advantage over Go in that the passenger service charges at Glasgow are estimated to be £12sterling per person, in contrast with... less than one pound sterling at Prestwick," said Mr Matthews.
Aer Lingus on the other hand flies to Edinburgh and Glasgow International.
"In general, low fares airlines' primary competition is still the flag carriers," said Mr Stephen Furlong of Dublin's Davy Stockbrokers.
They try to grab market share and stimulate new business. The loser in a probably be Aer Lingus rather than Ryanair.
A search of the three airline's websites at noon todayfound Ryanair quoting £29.85 for a Dublin to Glasgow return leaving on September 19th - the day Go begins operating - and returning a week later, Go was offering £45 and Aer Lingus £89.98.
