Sunday, February 21, 2010

Economics 21/02/2010: Planes, Buses and Swedes

A crucial difference between the Swedish 'socialism' and Irish Government's 'pro-market Partnership' is that the two are misnomers.

Take airline industry:
  • Irish Government owns a share of Aer Lingus - 25% and together with its friends (although sometimes quarrelsome) - the Unions the state controls 40% stake in the 'National Flag Carrier';
  • Irish Government monopolistically owns the entire airports system in the country allowing no competition whatsoever into the sector - presumably in line with the Irish Government's pro-private enterprise stance;
  • The LFV Group that owns and operates main Swedish airports is similar to our DAA / Aer Rianta and is also state owned - clearly in line with the Swedish Government's socialist credentials;
  • But in Sweden there are a private airport and a number of independently (municipalities) owned smaller airports;
  • The Swedish State currently owns 21.4% of the SAS - 'Flag Carrier Airline' (less than the shareholding by the pro-private enterprise Irish State in Aer Lingus) and
  • Earlier this week, Swedish deputy PM (Mary Coughlan's counterpart) announced that her Government is selling all of its holding in SAS. How come? “In the long run we don’t see any intrinsic value in owning shares in an airline,” she said.
Actually, in terms of monopolization of the service provision, Irish Airports stand at 100% monopoly ownership, while Swedish airports are close fringe challenging central monopoly, to the situation in terms of services competition one find in Irish bus services. Funny thing - we claim to have a deregulated bus market in Ireland...

Hmm, Bertie Ahearn had a point saying he was the last standing real socialist in Europe.

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