Ryanair denied that it is paying the price for expanding too quickly today as it confirmed plans to ground 12 planes at Stansted airport this winter and close seven European bases.
Europe's largest low-cost airline said it was cutting services on its busiest, least profitable routes at Stansted and was withdrawing planes from seven airports including Budapest and Valencia for a six-week period between November 4 and December 19. Michael O'Leary, Ryanair chief executive, denied that the airline had been forced into the cuts by an inability to fill a fleet that is expanding by more than 30 planes a year.
Instead, the outspoken airline boss said high landing fees at Stansted, imposed by "twats" at airport operator BAA, were the main reason for grounding the aircraft, with record oil prices of more than $140 a barrel also playing a part.
"Does oil have a part to play? Of course it does. But these cutbacks are happening at the most expensive airports." Asked if the cutbacks were a sign that Ryanair's 166-string fleet of aircraft is struggling for passengers amid a continent-wide downturn, he said: "Since the British invaded India, nobody has stopped travelling during a downturn. People are incredibly reluctant to give up their annual holiday."
O'Leary said the airline would lose less money by grounding its aircraft and not hiring personnel to fly them rather than operating them at a loss from Stansted. He said a recent increase in charges at Stansted to £10 per passenger had, along with soaring oil costs, made cheap fares such as Ryanair's £1 flights uneconomical.
"That fact that we have paid so cheaply for these aircraft means we can sit them on the ground over the winter. We can recruit the pilots and cabin crew later and we don't have to pay rapists like Stansted any money," he said. He added: "We are clearly not going to be selling millions of £1 fares on these flights from Stansted if we are over-paying Stansted by £10 per departing passenger."
Ryanair has admitted it will struggle to break even in the year to March 2009. It needs the price of oil to average $130 a barrel and hopes that an average fare increase of 5% will not put off passengers. O'Leary added today that fares might have to rise further if oil stays at more than $140 a barrel, although the collapse of competitors will help Ryanair as passengers flock to the most financial healthy carriers, he said. "Maybe fares will rise by 5% or maybe 10% ... it all depends on how many airlines go bankrupt this winter."
The airline will be making a 14% reduction in the number of weekly flights at Stansted this winter, from more than 1,850 a week to to just under 1,600 this winter. As a result, it will carry around 900,000 fewer passengers through Stansted than last winter. The number of planes based at Stansted will fall from 40 this summer to 28. O'Leary confirmed that Ryanair will not be abandoning routes at Stansted by grounding 8 planes. It will instead cut frequency, or the number of daily flights, on selected routes.
