WHEN Michael O'Leary speaks he likes to be heard.
The Ryanair chief executive paid a flying visit to Edinburgh yesterday to announce that he was to axe five routes with the possible loss of 300 jobs. His reason for travel was to pin the blame firmly on Edinburgh Airport's owners – currently BAA–- for failing to cut a deal with him over landing charges.
Mr O'Leary has a reputation for exaggeration. Of the five routes to be "axed", the three to Malmo in Sweden, and Murcia and Ibiza in Spain have only recently been announced and have not commenced. The Berlin route was due to end in May and the fifth route, to the Estonian capital Tallinn, has not flown since last November. As for the jobs claim, Ryanair does not employ any staff directly at the airport and BAA denied yesterday that there would be any job losses among the 500 Edinburgh staff. At worst there could a limited knock-on impact on tourism-related jobs and baggage handlers.
The background to this story appears to be a row between the two companies about the prospective rise in Air Passenger Duty and the rising cost of fuel, with Ryanair hoping BAA would absorb part of the cost. The airline's profits rose to £12.5m in the final quarter of 2011, despite dearer fuel and fewer passengers.
Ryanair is a major carrier at Edinburgh, representing 20% of the business, but if Spanish-owned BAA had given in to Mr O'Leary's demands for lower landing fees, the other 39 carriers using the airport would have formed a disorderly queue, looking for the same concessions. This would reduce the value of the airport, which is due to be sold by the summer, following a ruling by the Competition Commission. Any damage to a deal from yesterday's announcement would be comparatively modest.
Mr O'Leary may have seen no end to the Eurozone crisis and decided to pull in his horns, though he claims no-frills airlines should ultimately profit from the situation. Landing charges at Edinburgh are certainly higher than Prestwick but are on a par with other capital cities. Why else has Ryanair's business has grown rapidly in recent years?
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