Michael O'Leary, Ryanair chief executive, on Tuesday attacked BAA, the UK airports operator, for its “grandiose plans” for the expansion of London Stansted airport, the airline's single most important base in Europe.
BAA is planning to build a second runway and terminal facilities at Stansted in order to double capacity to around 70m passengers a year in a scheme, that it has estimated will eventually cost around £4bn.
The new runway, which is unlikely to be brought into operation before 2013 at the earliest, is expected to lead to a tripling of the current level of landing charges of around £3 per passenger.
“When the cost of a runway and even a second terminal should run to no more than £400m, the BAA's proposed spend of £4bn is gold-plating on a rip-off scale,” said Mr O'Leary.
He called for a break-up of the present BAA monopoly under which it controls all three of London's leading airports at Heathrow, Gatwick and Stansted.
“If the BAA monopoly was broken up, and Stansted forced to compete with Gatwick and Heathrow, then low cost efficient facilities would be developed with the co-operation of user airlines like Ryanair and EasyJet,” said Mr O'Leary.
“Instead we have the bizarre proposal that £4bn be wasted by Stansted, building facilities that its airlines unanimously oppose, with part of the cost to be subsidised by passengers at Gatwick and Heathrow, who get no benefit from Stansted. All of this waste is designed so that the BAA airport monopoly can claim a return on £4bn of capital expenditure instead of £400m.”
He accused the UK Civil Aviation Authority, the economic regulator which sets the price cap regime for the three BAA London airports, of “standing idly by,” while BAA ignored the wishes of its airline users. Stansted was already one of the world's most profitable airports, he said.
Mr O'Leary said that Ryanair supported the building of a second runway at Stansted, as the airport was already full at peak hours of the day with no available take off and landing slots, but only at one tenth of the price put forward by BAA.
“There is going to be a major regulatory battle during the next couple of years,” said Mr O'Leary. “We will call on the CAA to take action and not just rubber stamp BAA's proposals.”
In the BAA annual report to be published on Wednesday Mike Clasper, BAA chief executive, says of the group's negotiations with Ryanair “my job is to make sure we do the right thing for BAA shareholders. If that means getting tough, we will get tough.”