EasyJet says new £40m terminal at Luton threatens its survival

The discount airline easyJet boycotted the opening ceremony of a passenger terminal at Luton airport yesterday, claiming the £40m facility will lead to an increase in fares.

The discount airline easyJet boycotted the opening ceremony of a passenger terminal at Luton airport yesterday, claiming the £40m facility will lead to an increase in fares.

The company chairman and owner, Stelios Haji-Iannou, was in Paris on business despite being invited to attend the ceremony and other company representatives also stayed away.

James Rothnie, easyGroup's director of corporate affairs, said the airline planned to sue Luton airport for the damages incurred as a result of an alleged breach of contract over terminal use.

He said: "EasyJet will not attend the official opening of the new terminal because the airport is in breach of its contract with the airline.

"No disrespect is meant to the Queen, who is officially opening the terminal, but easyJet considers the new terminal an expensive mistake.

"Therefore, easyJet feels it is inappropriate to participate in a celebration of something that could jeopardise the long-term survival of both the airline and consequently the airport itself, with disastrous consequences for local employment."

Mr Rothnie had earlier erected a 40 metre banner at the entrance to the airport which read: "Barclays, pay for your own mistake". Security staff told him to take it down.

Mr Rothnie claimed easyJet had a contract with the airport guaranteeing access to the old terminal for a set fee. "During the term of the contract, the airport was privatised and the new shareholder is Barclays Bank. The new management insisted that easyJet move to their new terminal and have raised the fees that they are charging to the airline."

Laura Goodes, a spokeswoman for the airport, denied that easyJet's costs had increased. "We are disappointed that easyJet staff have not had the opportunity to participate in what is a great day. All of the other airlines, including Monarch and Britannia, accepted their invitation."

The new terminal, which houses 60 check-in desks as well as shops, bars and restaurants, will increase capacity to five million passengers a year.

During her tour of the terminal building yesterday, the Queen met two easyJet passengers, Ian and Eleanor Hall from Aberdeenshire, and watched them being checked in for their flight. Mrs Hall, who had been visiting her daughter in London, said she and her husband had paid £50 each for their return flight to Aberdeen.