Ryanair warned of 'severe' penalties if it quits Skavsta

The airports operator TBI warned yesterday that Ryanair would have to pay "severe financial penalties" if the no-frills airline pulled off some of its Scandinavian routes from Skavsta airport near Stockholm.

TBI, which is the operator of Skavsta, also said it had told Ryanair that the intra-Scandinavian routes it had decided to serve from the airport were not the best ones available.

Michael O'Leary, Ryanair's chief executive, disclosed earlier this month that it would drop services from Stockholm to Oslo, Aarhus and Tampere by the end of the year unless passenger numbers picked up, blaming TBI in part for the poor performance of the routes.

However, it emerged yesterday that 10 days after Mr O'Leary's warning, a senior Ryanair executive wrote to the mayor for Skavsta confirming plans for a massive expansion at the Swedish airport.

Michael Cawley, Ryanair's chief operating officer, told the mayor of Nykoping, Goran Forssberg, that the airline was "very pleased" with its development at Skavsta and was expecting to carry more than 1.5 million passengers in its first year of operations. By year three, this should have risen to 3 million passengers and by year six or seven he said he expected Ryanair to be flying 4.5 million passengers to 25 destinations with a fleet of up to eight aircraft, enabling Stavsta to overhaul Gothenberg in terms of traffic volumes.

Commenting on Ryanair's threat to scrap routes, Mr Brooks said: "Ryanair is committed to Skavsta in a big way. If they renege on those routes they would suffer severe financial penalties." He added that part of the problem was that Ryanair was not operating sufficient services on the routes. "When Ryanair picked them we didn't think they were the best ones to choose and we also told them they had to service the routes properly."

TBI, meanwhile, announced a halving of interim pre-tax profits from £15m to £7.2m after £9m of write-downs, mainly relating to its US airport services arm, and increased pension, rental and air traffic control charges. Underlying pre-tax profits slipped 9 per cent to £20m.