Ryanair is planning to chop its London Stansted traffic by 9% over the approaching 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 analyze 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, even though Stansted’s traffic has declined from 24m p.a. to 17.5m p.a. during 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 decrease its weekly operations by over 170 flights, with the lack 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 at the CAA regulator to provide an explanation for why Ferrovial/BAA is permitted to hike charges by 6% when UK inflation is under 3% and Stansted’s traffic continues to say no.
Ryanair’s Robin Kiely said, “It’s bad enough that Ferrovial/BAA has doubled prices over the last 6 years and presided over record traffic falls at Stansted, however appears that the CAA now rewards this commercial failure by allowing Ferrovial/BAA to again raise fees in 2013 to make amends for its traffic declines in 2012.
Given that Ferrovial/BAA has now agreed to sell the airport to MAG, it’s impossible to comprehend 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 component to a “sweetener” package to steer MAG to pay £1.5bn for Stansted Are passengers and airlines at Stansted again being hit so as to boost the sales proceeds for the Spanish giant, Ferrovial, from the sale of BAA Stansted
As the London Times has previously commented, the right response to a traffic decline will be to lower prices and grow volumes. Instead the Ferrovial/BAA monopoly, because it runs down the runway trousering £1.5bn from the sale of Stansted, is imposing an additional, unjustified 6% price increase one month prior to MAG’s takeover of Stansted. There’s something very smelly in regards to the timing and the dimensions of this price increase, that’s greater than double the velocity of UK inflation.
Ryanair believes that this price increase, so that it will clearly be of no benefit to Ferrovial/BAA, was component to a “sweetener” to MAG so that it will boost the sale price of Stansted Airport. The CAA must now investigate the explanations for this price increase and take action to give protection to 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.
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