O'Leary attacks BAA over 'rip-off' Stansted plans

Michael O'Leary, the chief executive of Ryanair, has called for the break-up of BAA, the airports group that operates all three major airports in the south-east of England, after accusing it of wasting £4bn on "grandiose" plans for a runway at Stansted.

Michael O'Leary, the chief executive of Ryanair, has called for the break-up of BAA, the airports group that operates all three major airports in the south-east of England, after accusing it of wasting £4bn on "grandiose" plans for a runway at Stansted.

Mr O'Leary, announcing a 29.5 per cent increase in pre-tax profits and a 24 per cent rise in revenues for the year to 31 March, said BAA was "gold-plating" its expenditure plans.

"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, which will result in overcharging of ordinary passengers for many decades into the future," Mr O'Leary said.

He said that if the BAA monopoly was broken up, and Stansted forced to compete with Gatwick and Heathrow, low-cost, efficient facilities would be developed with the co-operation of airlines such as Ryanair and easyJet. He said both low-cost rivals stood together in their opposition to BAA's plans. "There's not a lot in life that unites Ryanair and easyJet but we are dead set against this," he said.

Ryanair intends to try to block the development plans by first appealing to the industry regulator, the CAA. Mr O'Leary said: "If the CAA rolls over, we will go to the Office of Fair Trading and the Competition Commission to get it blocked there. We will also block it at a local level, in the planning permission process, where I suspect we will have the most success."

Mr O'Leary said it was "truly bizarre" that BAA could consider spending £4bn at Stansted on facilities that its airlines unanimously opposed, while part of the cost would be subsidised by Heathrow and Gatwick passengers who would get no benefit - a subsidy he said the CAA should block.

Ryanair's results bucked the trend of miserable financial news from the airline industry, hit most recently by rising fuel prices. The International Air Transport Association said on Monday higher oil prices were "destroying" the industry's profitability, leaving it facing $6bn (£3.3bn) of losses.

Ryanair, however, reported pre-tax profits of €296m (£200m) on sales of €1.3bn.