Ryanair Holdings Plc said it will boost passenger numbers at London’s Stansted airport by 50 percent to more than 20 million over 10 years after agreeing on terms for growth with new owner Manchester Airports Group.
Europe’s biggest discount carrier, which attracted 13.2 million customers at Stansted in 2012, is counting on the airport north of London for 25 percent of its expansion by 2019, Chief Executive Officer Michael O’Leary said today at a press briefing in London.
Ryanair is expanding at its biggest base after MAG agreed to trim a 6 percent increase in landing charges inherited with the 1.5 billion-pound ($2.4 billion) takeover from BAA Ltd. on Feb. 28. The Dublin-based carrier, which accounts for more than two-thirds of the airport’s passengers, had said when the MAG deal was completed that it would cut traffic 9 percent.
“This sort of growth can only be delivered on lower costs,” O’Leary said, calling the deal his airline’s “most transformational” for years. “It’s indicative of the new regime at Stansted and MAG that within a period of six months of taking over they are signing an aggressive and dramatic growth deal.”
Ryanair will support MAG’s efforts to draw long-haul airlines to Stansted, O’Leary said.
“If MAG want us to meet with prospective clients we will help encourage them,” O’Leary said. “The most obvious thing would be where long-haul passengers can connect in some way into our flights.”
Stansted could be redesigned, with one of its satellites potentially dedicated to long-haul flights offering for which services discount carriers are not willing to pay, said Stansted Managing Director Andrew Harrison. Check-in and security areas would be revamped to streamline processes, he said.
Ryanair, in a bid to capture more passengers, may also start working with travel agents after eschewing such arrangements to avoid complexity and costs, O’Leary said. The foray would be limited, he said, and avoid expensive booking systems used by other carriers.
The policy changes, along with a plan to update the airline’s website, come after Ryanair said Sept. 4 that it may miss its annual profit target after competition depressed ticket prices and a heat wave in Europe depressed bookings.
MAG earlier this year signed an accord with Luton, England-based EasyJet Plc, Europe’s second-biggest discount carrier, aimed at doubling the airline’s annual passenger count to 6 million in five years at Stansted. EasyJet’s biggest base is London Gatwick.
Combined growth from the two low-cost operators could help return Stansted’s passenger levels to their 2007 peak of 23.8 million from the current 17.5 million, Donal O’Neill, an analyst at Goodbody Stockbrokers in Dublin, has said.
Ryanair passenger totals at Stansted will reach 14.5 million next year, which will be home to many new Boeing Co. 737s the carrier agreed to buy this year. Ryanair currently bases 37 Boeing jets at Stansted, which will grow to 43 next year as the carrier expands its network from there to Lisbon, Bordeaux in France, Dortmund, Germany, and Rabat, Morocco.
With a terminal designed by U.K. architect Norman Foster, Stansted ranks third behind Heathrow and Gatwick among London hubs and fourth in the U.K. including Manchester. MAG made its purchase after Ferrovial SA’s BAA, now known as Heathrow Airport Ltd., was forced to cede assets following an antitrust probe.