Competition Commission could foil Ryanair plan for Stansted stake

The Competition Commission will stamp down on Ryanair’s bid to take a 24.9 % stake in any consortium that buys Stansted airport. Any more than this would definitely cause problems with regulators especially after the airline’s attempts to take over Aer Lingus. Ryanair believes that by investing in the group that eventually purchases Stansted, its interests will be better served as Ryanair is Stansted’s main tenant –  operating 41 planes there.  The Competition Commission  has suggested  in the past that resident airlines could own no more than a tiny slice – perhaps 5 or 10% of the airport, so that it cannot make decisions on how the airport is run which would hurt competitor airlines.  Michael O’Leary has been saying Stansted has permission for a 2nd runway. It does not. The application was withdrawn.

Watchdog could foil Ryanair plan for Stansted stake

By MARK LEFTLY  (Independent)
The Competition Commission will stamp down on Ryanair’s bid to take a 24.9 per cent stake in any consortium that buys Stansted airport.

This would again put the Dublin-based group at odds with regulators, with the European Commission having just launched a probe into Ryanair’s third bid in five years for rival Aer Lingus.

Michael O’Leary, the low-cost airline’s boss who has spoken of charging passengers to use the toilet, wants to take a stake in Stansted after a consortium buys the airport from current operator BAA. The Heathrow-owner has been forced to sell Stansted by the Commission as part of a break-up of what was deemed a monopoly in the South-east.

Ryanair believes that by investing in the group that eventually purchases Stansted, its interests will be better served as the airline that is arguably the airport’s anchor tenant.

Ryanair operates 41 planes out of the Essex site and wants the airport redesigned in its own no-frills image, including speedy turnaround times and less of what Mr O’Leary claims is wasted space, such as the train service from the terminal to departures. Manchester Airports Group is one potential bidder, as it is believed to be keen to extend its existing four-airport portfolio.

Mr O’Leary has insisted that he would only be looking for a one-quarter stake, admitting anything greater than that could run into regulatory difficulties. However, the Commission hinted strongly in its earlier investigation into BAA’s market dominance that resident airlines could own no more than a tiny slice – perhaps 5 or 10 per cent, according to sources close to the watchdog – of any airport that was later sold.

The fear is that the airline would make decisions that would hurt competitors at the same airport, which in Stansted’s case would include easyJet and Thomson Airways.

Stansted is expected to fetch more than £1bn, though valuations putting its assets at £1.3bn are thought to be on the high side.

Last week, Mr O’Leary said that he was interested in Ryanair helping to manage the airport, and that the next runway built in the South-east will be a second at Stansted



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    Ryanair expects to take 25% in Stansted

    Sep 05, 2012  (Travel Weekly)

    Ryanair expects to take a 25% stake in Stansted airport and boost passenger numbers enough to account for most air traffic growth in the southeast over coming years.

    Chief executive Michael O’Leary said a string of consortia keen on buying the airport had asked Ryanair “what would it take for you to grow traffic?”

    O’Leary said: “Most of the consortia want us to take a stake. I’d be happy with an agreement and no stake. But they’re keen to work with Ryanair to increase traffic.”

    Stansted’s current owner BAA abandoned attempts to overturn a Competition Commission ruling and put the airport up for sale last month. A deal is expected by the end of the year.

    Speaking in London yesterday, O’Leary blamed “gross mismanagement by BAA” and “complete regulatory incompetence by the CAA” for a sharp decline in traffic at Stansted over the past five years. He said: “There is enormous opportunity for cutting the cost base at Stansted.

    “You could take the airport [from 30 million] to 60 million passengers a year and account for nearly all the growth in the southeast.”

    O’Leary said: “Most of the potential bidders [for the airport] want to make as much money as they can quickly. We have a different vision. We’d like to be involved long term, significantly lower costs and drive rapid growth.

    “We’d get rid of the cathedral-like check-in hall. We’d get more space airside for retail. We’d blow up the Noddy train that costs £1 million a week to shuttle to a terminal 40 yards away. We’d do sensible things.

    “We’d change the whole structure of the airport to lower costs, increase the number of flights and increase traffic.”

    However, O’Leary said Ryanair would take no more than a 24.99% stake because “more would cause a regulatory problem.”

    He insisted: “The next runway in the southeast will be at Stansted, before Heathrow or Gatwick. It already has planning permission. [This is NOT true. BAA withdrew the application. See link   It is very remiss of Michael O’Leary to imply this, incorrectly ]. Not in my lifetime or my children’s lifetimes will there be a new airport in the Thames estuary.”

    But he said there would be new runways at Heathrow and Gatwick, arguing: “The government needs to come up with an aviation strategy. Pandering to environmental dimwits is not a strategy.”

    And he had a message for “those who have bought houses near Heathrow”: “Get over yourselves or move.”




    BAA’s second runway planning application, made in early spring 2008 to Uttlesford District Council, was ‘called in’ by the Secretary of State for Communities, Hazel Blears, with the intention that it should be heard at a Public Inquiry. This had been scheduled to take place in April 2009, lasting up to a year and a half, but the Inquiry was postponed pending consideration of the Competition Commission’s requirement that BAA should sell Stansted Airport to address the airport monopoly situation in the south east. Then, in March 2010 after the Coalition Government withdraw policy support for a second runway, BAA withdrew the planning application entirely.

    Locally, the environmental impacts of a second runway would have been devastating. It would have meant the destruction of communities that have developed over centuries as well as vast swathes of unspoilt countryside and ancient woodlands and the loss of homes. BAA’s proposed land grab of almost 800 hectares for a second runway and related development would have created an airport site bigger than Heathrow.

    Click here for more on the second runway application.



    Stansted to withdraw runway planning application

    24 May 2010  (BAA website)

    Stansted Airport today announces that it is withdrawing its application to build a second runway at the airport.

    The move follows a clear indication that Government airports policy will change, following the recent General Election. Stansted will also withdraw, with immediate effect, the provision for assisted relocation within the home owner support scheme¹ introduced at Stansted in 2004.

    However, in line with assurances given to local people, the airport will proceed with the purchase of eligible properties currently going through the process, where it can be demonstrated that the owner is marketing or has marketed the property, and has not been able to agree a sale.

    David Johnston, Stansted Airport’s managing director, said: “We have reflected carefully on the new Government’s clear intention to change its airports policy and have moved quickly to withdraw this application.

    “Stansted Airport is a key driver of economic growth in this part of England, and we will continue to work hard to bring new business here and to work with our neighbours, and the wider community, to provide jobs and strong business and travel opportunities in the months and years ahead. We continue to believe that new airport capacity is needed in the South East of England, to strengthen the UK’s international trading links.”