UK AIRPORT manager BAA has begun legal action against Ryanair to force it to pay it a recent 15 per cent increase in airport charges at Stansted airport in London.
Ryanair wrote to the BAA in May to inform it that it would be withholding the increase in airport charges at Stansted, which took effect on April 1st.
In a document lodged with the Securities and Exchange Commission late last week in the US, Ryanair claimed that the increase constituted "excessive pricing" and was an abuse of BAA's "dominant position in the London market and contrary to the public interest".
This is part of a long-running dispute between Ryanair and BAA in relation to airport charges at Stansted. Ryanair plans to ground 15 aircraft there this winter in protest.
BAA, which is owned by Spain's Ferrovial, operates Heathrow, Gatwick and Stansted airports in London.
BAA could not be contacted about its latest spat with Ryanair but it has consistently rejected the Irish airline's charges against the company. Ryanair estimates that the increase in airport charges would cost its passengers £23 million in a full year.
It is understood that BAA informed Ryanair in July that it was taking action in the High Court to secure the money.
Jim Callaghan, Ryanair's director of legal and regulatory affairs, confirmed that the airline was being sued. "It's trying to force us to pay, but we're pretty confident that this constitutes excessive pricing and is an abuse of their dominance," he told The Irish Times.
He said Ryanair had also made a complaint to Britain's Competition Commission, which is currently carrying out a review of Stansted's airport charges.
Passengers booking flights with Ryanair through Stansted are being charged the increase by the airline. Mr Callaghan said the disputed money is being held in a separate account until the row is resolved. "The increase is going into a separate account pending the outcome of the litigation."
Stansted is Ryanair's biggest base. In a submission in May to the competition commission, the Michael O'Leary-led airline said Stansted was the most expensive airport of 20 that it uses in the UK and its most costly base in Europe.
The Irish airline also advocated the break up of BAA.
"I hope that the competition commission will make a public interest finding, and if that is the case, then we think the legal action will come out in our favour," Mr Callaghan said.
Airport charges are normally passed on by airlines directly to passengers. Mr Callaghan said this is not always the case and that Ryanair absorbs the charge whenever it gives away free flights.
Ryanair said last month that up to 20 per cent of its seats would be given away free in the current financial year as it seeks to generate business in the face of rising oil prices and recession.
Mr Callaghan said it was difficult to pass on the higher charge at a time when airlines were struggling to attract passengers.
"At a certain stage you can't pass it on or you can't pass it all on," he said.
