Ryanair announcement that it would be starting flights into Ukraine seem to have touched the wrong side of corporate interests of business owners in the country, prompting cancellation of the deal. Ukraine still languishes from its soviet economic spirit of monopolistic tendencies into nowadays full blown oligarchic business model. The fact that the oligarchs have no time for competition is a worrying trend that only leaves to showcase the fact that doing something about societal change is as distant and dramatic as it has always been.
Ryanair business model of low cost single digit fares is one of the most revolutionary products of the deregulation regimes of the 1990s. The airline led to proliferation of towns that sole survival depended on access to the airliner budget travel, a great fete that positively impacted on the business future of many entrepreneurs in Europe. It is without doubt that Ukraine would have benefited a great deal from the negotiation incase the hurdles were overcome.
The Oligarchs of Ukraine
The oligarchs nonetheless need to prove to the court the interests that they serve, as the announcement has had a remarkably positive perception from the Ukrainian business community who would have benefited a great deal from the agreement. The fares that the airline had already published in the newspaper elucidated great enthusiasm and optimistic undertones from the citizenry of Ukraine. The oligarchs led by billionaire Ihor Kolomoisky, however have professed little appetite for the kind of competition this agreement was to usher in the country. The prime minister and his infrastructure counterpart urged for the airports bosses to consider their stance. In the likely scenario that the oligarchs will intensify their resistance in the corridors of Ukrainian courts, the benches need to consider the interest of the majority over the few.
Other States Were Also Forced to Deregulate its Air Traffic
In fact, the case study of Latvia another ex-soviet state comes at hand for the Ukrainians. Latvia was forced to deregulate its air traffic in the 1990s, leading to the collapse of the inept, poorly managed national airliner of the time. In truthful context, its costs were unmatched to the low costs strategy of Ryanair. However, at the event of time, the national carrier was forced to restructure, adopt a new business level strategy that propelled it to the pride it is today. Speaking of now, the Latvia airline is a proud national carrier that operates profitably alongside the low budget carrier Ryanair. Picturing this, one would have argued for protection in the early years, but today the people of Latvia have reaped the full benefits of liberalization.
Ryanair concept operates basically on the aspects of deregulation as incentives. The other facets include de-unionized labor and low-cost fuel as well as negotiated tax regimes, and tough turnaround times. These are features that the Ukrainian airport authority should consider heavily for the benefit of all Ukrainians.
We are not in any way related or affiliated with Ryanair. The views laid therein are neutral and are a product of our fan and part criticism of the airline.