Ryanair to cut Stansted fares in drive to reach passenger targets
Ryanair will have to cut fares to meet passenger targets in a new Stansted Airport deal, chief executive Michael O’Leary said today.
The Irish airline has revealed plans to increase passenger traffic at Stansted by 50% to more than 20 million, reversing a threat to cut flights at the airport.
Under a 10-year deal starting next year, the low-cost airline will benefit from lower airport charges if it meets passenger growth targets.
The deal with new owner Manchester Airport Group will create an estimated 7,000 jobs at the site, the company claimed.
Mr O’Leary said it expected to grow passenger numbers by a million a year over the first seven years of the deal, but admitted that fares and margins will have to fall, and some services will have relocate from other airports.
Mr O’Leary also said Ryanair was working with the airport to help attract long-haul airlines.
The carrier had threatened earlier this year to cut flights from the Essex airport by 9% because of increased fees, but has now reached a deal with Manchester Airport Group.
It expects traffic to increase from a 2012 level of 13.2 million to 14.5 million in the first year of the agreement.
The number had fallen from a 2007 peak of 15 million, blamed by Ryanair on increasing fees charged by previous owner BAA.
Announcing the deal with MAG at a London press conference, Mr O’Leary said charges were still “very high”.
He added: “We’ll be cutting some capacity at other airports for summer 2014 because there’s now incentive for us at Stansted to grow aggressively.
“Stansted’s already our biggest business but it’s about to get an awful lot bigger.”
The new agreement is expected to see the airline operate more than 2,000 flights a week from the airport, up from 1,800.
Stansted hopes to increase annual passenger numbers to 30 million a year over the next 10 years, making it London’s fastest-growing airport.
Offering his thoughts on the airport capacity squeeze facing the capital, Mr O’Leary declared the current official review “pretty much a waste of time” while scoffing at the idea of a “Boris Island ” airport in the Thames.
He said the best solution environmentally was for Stansted, Heathrow and Gatwick each to build an extra runway since they all had infrastructure in place, rather than embarking on building a new hub.
“This country has repeatedly proved itself incapable of delivering big infrastructure projects on time and in budget,” he said.
Ryanair also announced that it is launching new routes from Stansted to Bordeaux, Dortmund, Lisbon and Rabat from this winter.
