Low-cost carrier Ryanair to take legal action against BAA

Low-cost carrier Ryanair to take legal action against BAA

Ryanair has confirmed it will launch legal action against BAA as it seeks to recover the “substantial overcharges” the airline believes it suffered due to “monopolistic” position of the airport operator in the south of England.

The decision follows confirmation from the British Competition Commission BAA will be forced to sell Stansted as well as either Glasgow Airport or Edinburgh Airport.

Low-cost carrier Ryanair confirmed the decision to take legal action against BAA as it confirmed a modest increase in profits for the first quarter of financial 2011.

With revenue rising 29 per cent, to €1,155 million, Ryanair saw profits increase one per cent to €139 million.

Passenger traffic also increased 18 per cent, with the Irish carrier accommodating 21.3 million passengers in the three months to June 30th.

However, Ryanair added traffic growth was “flattered” by airspace closures in April and May 2010 - following the Icelandic volcanic eruptions - which led to the cancellation of 9,400 flights and the loss of almost 1.5m passengers.

Average fares at the airline rose 11 per cent over the period.

Ryanair maintained its outlook for the rest of the year, anticipating traffic growth of four per cent for the full year.

This will comprise ten per cent growth over the first half of the year, matched to a four per cent fall over the second half, due to already announced winter capacity cuts.

“With very limited visibility on second half bookings or yields at this time, our full year guidance remains unchanged as we expect profit after tax for full year to be similar to the previous result of €400 million,” added Ryanair chief executive, Michael O’Leary.