Ryanair shares fall as Stansted contols altered
Shares in Ryanair fell yesterday as the UK's aviation regulator paved the way for higher charges at Stansted -- the airline's biggest base.
The UK's Civil Aviation Authority (CAA) is deregulating Stansted effective from April, releasing it from price controls. The watchdog said that Stansted lacks "substantive market power" in light of the long-term contracts it has in place with its airline customers.
Ryanair is Stansted's biggest customer, accounting for 75pc of its annual 17.5 million passengers. Stansted has been owned since last year by Manchester Airports Group (MAG).
Last year, Ryanair signed a 10-year deal with MAG to increase its passenger traffic at Stansted from 13.2 million passengers a year to over 20 million by 2023, in return for lower costs and more efficient facilities at the airport.
Yesterday, Ryanair lashed out at the CAA's decision to deregulate Stansted amid a review of three major London airports, also including Heathrow and Gatwick.
"Today's deregulation decision by the CAA will allow Stansted to increase charges in future and will result inyet more damage to UK consumers and competition," it claimed.
Ryanair shares fell 2.3pc.
But MAG said the CAA decision was "positive recognition" that competition rather than regulation will deliver the best outcome in Stansted's case.
At Heathrow, the CAA has decided to cap fees at 1.5pc below inflation between April this year and 2019.
It said stronger passenger forecasts had informed its decision, and that there would still be a "supportive environment" for capital expenditure at Europe's busiest hub.
Shares in Aer Lingus, the third biggest operator at Heathrow, edged slightly higher.
"In October, the CAA accepted the need for changes to their April proposals, but has now reverted to a draconian position," Heathrow chief executive Colin Matthews said. "We will review our investment plan to see if it is still financeable."