No-frills Ryanair cuts back due to fuel costs

/ Source: The Associated Press

No-frills airline Ryanair said Thursday it will withdraw nearly a third of its aircraft from its major London base and suspend operations at seven other European airports because of sky-high fuel costs and its failure to negotiate lower airport fees.

This will be the second straight year that Ryanair Holdings PLC reduces its activities at Stansted Airport for its winter season running from October to March amid soaring fuel costs and dropping consumer demand.

Ryanair said it would operate 28 aircraft at Stansted starting in October, down from 40. Chief Executive Michael O’Leary told a London news conference he expects the cutbacks to cost 900 jobs at the airport northeast of London, including 150 Ryanair employees.

Separately, Ryanair announced it will cancel its services from Nov. 4 to Dec. 19 at seven destinations: Basel in Switzerland; the Hungarian capital, Budapest; the Polish cities of Krakow and Rzeszow; Palma and Valencia in Spain; and Salzburg in Austria. And it warned of further disruptions if those airports don’t discount their fees during low-demand periods.

Deputy Chief Executive Michael Cawley said those bases were being temporarily shut because “high airport charges, and the massive increases which we face in fuel prices, makes it more profitable for Ryanair to ground aircraft rather than fly them at these airports during this period.”

A spokesman for Budapest Airport, Domokos Szollar, said Ryanair did not pursue serious negotiations and merely sent a “form letter” demanding lower wintertime fees before cutting services during a particularly slow few weeks.

“It’s curious that Ryanair is restarting its flights just in time for the Christmas season,” Szollar said. “This is not about Budapest Airport being expensive, but about Ryanair wanting to save money.”

Dublin-based Ryanair said it would operate 14 percent fewer flights from Stansted than during the previous winter season.

Ryanair said it also was transferring some Stansted-based aircraft to new winter routes, chiefly to Spain’s holiday islands.

O’Leary blamed BAA PLC, the company that operates all the major London airports, for forcing Ryanair’s hand, and issued an identical complaint against the Dublin Airport Authority.

In both cases, airport managers rejected a Ryanair proposal for lower fees per passenger in exchange for as uninterrupted winter business. “Monopoly airports ... have delivered high prices and awful facilities. It is time we allowed competition to deliver where monopolies have failed,” O’Leary said.

BAA offered no immediate reaction to O’Leary’s criticisms, but the Dublin Airport Authority dismissed them, saying O’Leary’s demand for “anticompetitive support mechanisms” was “justly declined.”