Ryanair boss jets in to slash capital routes

Michael O'Leary is set to announce swingeing cuts at Edinburgh. Picture: PA
Michael O'Leary is set to announce swingeing cuts at Edinburgh. Picture: PA
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HE IS the maverick chief executive of Ryanair who is not afraid to speak his mind to passengers and industry bosses alike.

Now Michael O’Leary is turning his wrath on Edinburgh Airport – jetting into the capital this morning to announce swingeing cuts. The announcement, which is anticipated by insiders to be “fiery” and “direct”, is believed to have been sparked by a row with airport operator BAA over the financial terms of Ryanair’s contract with the airport.

Michael O'Leary will arrive in Edinburgh this morning. Picture: Phil Wilkinson

Michael O'Leary will arrive in Edinburgh this morning. Picture: Phil Wilkinson

The budget carrier’s cutbacks, which are likely to see a “significant” number of Ryanair’s 40 routes axed from its Edinburgh summer schedule, comes after months of negotiation between the airport and the Dublin-based airline.

Terms of the deal between the airport and the budget carrier are usually renegotiated every five years – with the latest contract due to expire in October.

It is believed that Ryanair has played hardball over the most recent negotiations – threatening the airport, which was put up for sale by BAA last year – that it could stage a major withdrawal from the base if a “suitable” deal were not reached.

The loss of such a major airline from the airport could cause problems for BAA, which is seeking a buyer for the facility.

Ryanair is thought to have wanted to increase the number of passengers flying with the airline from the airport – already Scotland’s busiest – but, at the same time, reduce the amount of money it pays to BAA in fees.

The airline yesterday issued a notice saying Mr O’Leary would arrive in the capital early this morning at the Hilton Edinburgh Grosvenor hotel to “announce cuts at Ryanair’s Edinburgh base for summer 2012”. Later in the day, he is due to appear before Westminster’s all-party aviation group in London, where he will be forced to defend himself over pricing and customer service issues.

“The fact that Michael O’Leary himself is flying over suggests it is fairly significant – and he is likely to deliver the message in his typical fiery and direct style,” said one insider.

However, experts insisted that Ryanair was unlikely to stage a full-scale withdrawal from Edinburgh.

“It is likely to be a wound rather than a death,” said one source close to the situation.

“Whatever happens, he will need his core routes from a few of his core bases, such as Dublin, Stansted and so on – and I would say Edinburgh is among them,” said Laurie Price, head of aviation strategy at Mott MacDonald.

“Why would he not want to serve the capital of Scotland? If he did pull out of a key route, like Edinburgh to Stansted, there would be a lot of other airlines standing about waiting to thank him and step into the gap.”

Mr Price said he believed that the row with BAA could be a smokescreen for economic factors which have forced Mr O’Leary to pull back his Scottish operations.

“What he is doing here is typical in the market, but Michael O’Leary likes to believe he is the only one who can walk on water,” he added.

“He will use Edinburgh Airport’s alleged intransigence to do what any other commercial operator would do in these circumstances.”

Last June, Ryanair announced it was to axe more than a quarter of its routes from Edinburgh Airport – and a further three from Prestwick – over the winter period to cut costs because of high oil prices.

The no-frills carrier said it would not fly to nine of the 32 European destinations it offered from Edinburgh last winter. A total of 20 of its 100 flights a week from the airport were cut. They include Berlin, Malta, Marrakesh, Tallinn and Turin.

Days later, it also announced the cuts at Prestwick Airport, axing routes to Girona airport in Spain, London Stansted airport and the Austrian ski resort of Salzburg.

Across Europe, the airline grounded around 80 of its aircraft across Europe this winter – citing higher airport charges, as well as rising fuel costs.