Low-cost airlines take fight to BAA

Ryanair and easyJet are preparing to challenge the proposed £3.5bn expansion of Stansted airport, claiming that it poses a threat to the low-cost airlines.

The two companies are outraged that airport operator BAA wants the airlines to fund the development through higher landing charges.

And they have accused BAA of "gold plating" its development proposals, claiming the expansion could be done for a tenth of the cost. The companies are seeking meetings with BAA executives to present their case and have also raised the issue with the regulator.

In a letter to the Civil Aviation Authority, easyJet says: "The planned development and financing of new runway capacity at Stansted completely ignores the reality. [It] does not take into account the crucial requirement for all low-cost airlines: a low-cost base. Any planned expenditure must not be allowed to run the risk of putting the airlines' future at Stansted in jeopardy."

A spokesman for Ryanair added: "The proposals are a complete nonsense. We will not allow them to go unchallenged."

BAA figures circulated to the airlines show that it intends to phase the development in three parts. BAA proposes to submit a planning application for phase one, which will cost up to £2bn, in 2006, with the development expected to be compete after 2012. The second and third phases, at £990m and £580m respectively, are not expected to be competed until 2020 and beyond.

It is thought that phase one would add around £2 to the average ticket price. But the low-cost airlines believe that they must absorb the costs themselves as customers would baulk at higher prices.

A BAA spokesman said: "Anyone who talks about us building a gold-plated facility with marble pillars is talking nonsense. The development will be designed to accommodate the low-cost airlines, but we also need to cater for future airport uses."

He added that the way BAA was regulated and financed would not enable the company to fund the Stansted expansion on a speculative basis.