Ryanair out on a limb over BAA charges

Ryanair out on a limb over BAA charges

Ryanair has launched legal action against BAA in an attempt to recover up to £175 million in fees it believes it incurred at Stansted Airport due to the “monopolistic” position of the airport operator.

Ryanair has requested lawyers Nabarro take the case to the CAA and Competition Commission, with the potential for the dispute to reach the High Court.

The airline is seeking to recover the sum which it paid to Stansted between 2007-2011 – during which time charges have doubled from €3.30 per passenger to €6.60.

“Stansted’s regulatory accounts, in our opinion, clearly show BAA gaming the regulatory system, and abusing its monopoly power to inflate its regulated asset base and inflate its costs in order to overcharge airlines and passengers at Stansted,” said Ryanair chief executive Michael O’Leary.

“BAA Stansted has inflated their regulatory asset base by over £270m in inflation adjustments, and by £200m in second runway costs, for which there is no justification.”

However, the response has been one of bewilderment from the authorities.
The CAA and the Commission have confirmed they cannot reset charges midway through a five-year regulatory period.

Colin Matthews, BAA chief executive, was also quick to dismiss O’Leary.
“It is not a coincidence that he is raising this issue now. He’s got a direct interest in depressing the value of Stansted.”

Competition Commission

Also in the UK today, the Competition Commission has confirmed the final ruling on the merger of Thomas Cook, Co-operative Group and Midlands Co-operative Society has been delayed.

Despite provisionally giving the go ahead last week, the commission today said it was moving the deadline for a final decision from August 16th to October 11th.

Thomas Cook had hoped to complete the deal by October, a process likely to take about six weeks from the final ruling.

The deal would create a chain of more than 1,200 high-street agents – the largest in the UK.