*Ryanair slashes budget flights

Ryanair is to slash capacity between Spain and the UK and Ireland by withdrawing more than half of its 62 routes from Alicante.

The low-cost airline also plans to reduce the number of aircraft at the airport from 11 to two from October in a row over the cost of facilities.

Routes to be axed include Bournemouth, Cork, Derry and Knock. Frequency will be cut to destinations including Birmingham, Bristol, Dublin, east Midlands, Edinburgh, Leeds/Bradford and Prestwick.

The airline claims that a rise in handling charges of more than € 2 million are an abuse of power by the airport operator AENA and has filed a formal complaint with the Spanish government and European commission.

Chief executive Michael O’Leary said:

“Alicante Airport has opened up a new terminal building which was not needed, and to pay for it, Alicante expects efficient airlines like Ryanair to now use the same inefficient and high cost airbridges that other high fare flag carrier airlines prefer to use.”

He claimed that the airport would lose over €30 million a year in revenues, more than 2.5 million passengers and over 2,000 jobs, as Ryanair aircraft and flights are cut by up to 80% from October.

Comment: Brinkmanship or a sign of things to come?

Mr O’Leary is famed for this tough negotiating style and this announcement is no doubt at least partly aimed at improving commercial terms for his business.

However, with oil prices hitting a two and half year high yesterday, all low-cost airlines are running the rule over their least profitable routes.

On 27th of March, EasyJet chief executive Carolyn McCall announced the firm was “going to be very, very tough about routes that aren't working”.

The overseas property boom of the late nineties and early noughties was driven by rising house prices and cheap air travel. The former was removed dramatically as housing markets across the globe crashed in 2008. Sky-high oil prices may just remove the later.

The overseas property boom was created by a unique set of circumstances that may never be repeated. The new era is one of slow house price growth (in established markets) and permanently higher airfares with fewer routes and less flights on offer.

Selling property in prime locations has never been more important.

Source: Global edge

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