Ryanair is planning to cut its London Stansted traffic by 9% over the coming year (from 12.5m to 11.4m) after what it describes as ‘a further unjustified increase of Stansted’s already high charges of 6% from April 2013’.
Ryanair has called on Stansted’s regulator, the CAA, to investigate whether this unjustified and unwarranted 6% price hike was a “sweetener” by Ferrovial/BAA’s sale of Stansted, which raised £1.5bn in proceeds for Ferrovial, despite the fact that Stansted’s traffic has declined from 24m p.a. to 17.5m p.a. over the last 6 years.
Ryanair, which says it had planned to grow its Stansted traffic by 5% from April 2013, will now cut frequencies on 43 of its routes and reduce its weekly operations by over 170 flights, with the loss of 1.1m passengers (-9%) and over 1,100 jobs at Stansted, in direct response to this unwarranted and unjustified 6% price hike.
Ryanair called on the CAA regulator to explain why Ferrovial/BAA is allowed to hike charges by 6% when UK inflation is less than 3% and Stansted’s traffic continues to decline.
Ryanair’s Robin Kiely said, “It’s bad enough that Ferrovial/BAA has doubled prices over the past 6 years and presided over record traffic falls at Stansted, but it appears that the CAA now rewards this commercial failure by allowing Ferrovial/BAA to again raise fees in 2013 to compensate for its traffic declines in 2012.
Given that Ferrovial/BAA has now agreed to sell the airport to MAG, it is impossible to understand why the BAA monopoly is again raising Stansted’s prices from April 2013 when it clearly won’t be running the airport from that date. Ryanair and other Stansted airlines now must ask was this surprise price increase part of a “sweetener” package to persuade MAG to pay £1.5bn for Stansted? Are passengers and airlines at Stansted again being hit in order to boost the sales proceeds for the Spanish giant, Ferrovial, from the sale of BAA Stansted?
As the London Times has previously commented, the appropriate response to a traffic decline would be to lower prices and grow volumes. Instead the Ferrovial/BAA monopoly, as it runs down the runway trousering £1.5bn from the sale of Stansted, is imposing a further, unjustified 6% price increase one month in advance of MAG’s takeover of Stansted. There’s something very smelly about the timing and the scale of this price increase, which is more than double the rate of UK inflation.
Ryanair believes that this price increase, which will clearly be of no benefit to Ferrovial/BAA, was part of a “sweetener” to MAG in order to boost the sale price of Stansted Airport. The CAA must now investigate the reasons for this price increase and take action to protect Stansted users from this latest example of price gouging from Ferrovial/BAA. ”
The sale of the Stansted Airport to Manchester Airport Group (MAG) was completed for £1.5 billion earlier this week.