Tuesday 21 October 2014

Ryanair's plans to buy into Stansted airport grounded

Published 10/10/2012 | 05:00

RYANAIR was forced to pull out of its campaign to buy into Stansted airport yesterday after it claimed it was told by Spain's Ferrovial Group, which controls the BAA-owned facility, that a bid from the Irish-owned carrier would not be accepted for the forthcoming sale of the UK facility.

The news represents a major blow for Michael O'Leary's airline, which accounts for 70pc of Stansted's traffic and had long been gearing up to buy a significant share in the busy London-serving airport.

Ryanair's Stephen McNamara said: "We regret Ferrovial's decision to exclude Ryanair from the Stansted sale process and the failure of the Competition Commission to restrain this anti-competitive and anti-customer behaviour by Ferrovial.

"While we fully accept that Ferrovial is entirely free not to sell to Ryanair, we fail to understand how it can comply with competition law if Stansted's biggest customer, accounting for 70pc of the traffic, is excluded from this sale process."

Mr McNamara went on to criticise what he called the "extraordinary damage" done to Stansted airlines and passengers by "the Ferrovial/BAA monopoly".

He cited a 25pc fall in traffic since 2007 as evidence that Ferrovial/BAA had harmed the airport's prospects with charges at levels that Ryanair has constantly described as excessive.

He added that the airline looked forward to discussing cost reductions and traffic growth at the airport when it is finally sold.

Despite the setback, Ryanair has reiterated its commitment to the airport and also confirmed that it would "continue to explore traffic growth opportunities" there.

Inevitable

When contacted by the Irish Independent yesterday, a spokesman for BAA said it would not be commenting.

"There is a confidentiality agreement in place regarding the sale process and so we can't say anything at this point," he said.

Until yesterday, Ryanair's prospects for the acquisition had looked good, especially following the failure of a last-ditch bid by BAA earlier this year to contest the forced sale through the UK's court of appeal.

The sale of the airport has been ordered by the British Competition Commission.

Industry sources had believed a Ryanair buy-in was virtually inevitable. The airline had previously announced prior negotiations with five interested consortia.

It has been estimated that Stansted is worth around £1.3bn (€1.5bn) and the Irish carrier had planned to buy a minority stake with plans to shell out at much as €200m alongside a majority purchasing partner.

The decision by Ferrovial to blackball Ryanair or a related bid means that other interested parties which have previously talked to the airline will now have to consider stumping up more cash for an acquisition or else give up on bidding.

Irish Independent

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