Ryanair grounds quarter of its planes at Stansted
17 July 2008, 1:50pm
Ryanair is to stand down a quarter of its fleet at Stansted and close seven continental European bases before Christmas.
The unprecedented cutbacks at Europe's biggest budget airline indicate the depth of the aviation recession.
Ryanair said today eight of its 36 aircraft at Stansted will sit idle on the tarmac this winter.
The move at London's third airport and Ryanair's biggest base follows the decision earlier this week to stand down four aircraft, about a fifth of its fleet, at Dublin.
The cuts at Stansted will result in Ryanair axeing nearly 300 of its 1860 weekly flights. They were blamed on soaring fuel costs and take-off and landing charges.
But Ryanair also admitted that because of the slump in consumer confidence it forecasts that 900,000 fewer passengers are likely to fly with the airline from Stansted this winter.
Ryanair chief executive Michael O'Leary said the cutbacks followed a doubling in the price of kerosene in line with the crude oil price over the past year, and BAA putting up airport fees at Stansted by 15% this year on top of a doubling of charges last year.
O'Leary said Stansted's owner BAA had refused its appeal to keep all its aircraft at the Essex airport flying in return for a cut in charges.
Its refusal to negotiate, said O'Leary, was the fault of the regulator the Civil Aviation Authority, which continued to allow BAA, which also owns Heathrow and Gatwick, to act as a London airport monopoly.
"These cutbacks show just how damaging the BAA airport monopoly has become to consumers and the best interests of London and UK tourism and the economy generally,î he said.
"When a regulatory monopoly makes it more profitable for airlines to sit aircraft on the ground rather than fly them through the winter, then obviously the CAA's laughable regime has failed.î The Dublin and Stansted service-begin at the start of the winter schedule in November.
The European base closures will see Ryanair give up an estimated 300,000 passengers. Services to and from Valencia and Krakow are affected most.
O'Leary warned earlier this summer that if oil stayed above $130 a barrel Ryanair would make a loss this year. Brent crude has been above $130 for the last two months.
Shares in Ryanair, which have halved since last autumn, limped back above €3 for the first time in a month on news of the sharp cost-cutting. The stock was 11 cents higher at €3.04.
http://www.thisismoney.co.uk/...tml?in_article_id=447545&in_page_id=3
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