Ryanair to cut Stansted flights

31-07-2007

Ryanair to cut Stansted flights
Budget airline Ryanair has announced that it is cutting flights from Stansted airport by 20 per cent this winter in response to higher airport charges.

The decision to cut services from the airline's biggest base comes despite Europe's largest low-cost carrier reporting a "record" 20 per cent rise in first quarter profits.

Ryanair's profits after tax rose to €138.9 million (£93.8 million) in the three months to the end of June, the Irish carrier confirmed in a statement today. In the same period last year post-tax profits stood at a lower €116 million (£78 million).

An 18 per cent increase in passenger volumes are deemed by Ryanair to have driven the rise, with 12.6 million air travellers transported by the airline over the first quarter.

However the airline, which said that average ticket prices had been flat during the period and were expected to fall in the second quarter, stressed that its full-year outlook for yields remained "cautious".

Ryanair said its unit costs had increased by five per cent over the first quarter as a result of a doubling of airport charges at Stansted and higher charges at Dublin airport.

The airline said that it had subsequently taken the decision to reduce the frequency of services from Stansted and to temporarily halt flights on some routes from the airport which would otherwise be loss-making.

As a result seven of the 40 Ryanair planes based at Stansted will be grounded over the winter.

Commenting on the decision Ryanair chief executive Michael O'Leary claimed that higher airport charges at Stansted had caused traffic levels there to decline for the first time in 15 years and accused British airports operator BAA of providing a service at the airport which was "nothing short of appalling".

"This winter we will sit seven of our 40 Stansted based aircraft on the ground because Stansted's higher airport charges make it more profitable to ground these aircraft during the winter rather than fly them," he said.

Ryanair said that by reducing capacity on non-profitable winter routes it expected to achieve "significant" airport cost savings, upping its profit forecast as a result. The airline now expects to report a ten per cent increase in its full-year net profit, compared to the five per cent previously forecast.



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