Capital gains as Ryanair really takes off

THE no-frills airline Ryanair yesterday announced its first major expansion at Edinburgh Airport, after claiming it had won an eight-year battle to cut landing fees.

The Irish carrier will launch flights to Alicante in Spain and Marseilles in France in March, and to Frankfurt and Bremen in Germany and Pisa in Italy the following month.

It will compete with other airlines already operating on three of the routes, with Marseilles a new link for Edinburgh and only Bremen representing a first for Scotland.

The airline had previously been an arch critic of BAA, which runs Edinburgh airport, accusing it of operating a high-cost monopoly.

However, Michael O'Leary, its chief executive, who made the announcement in Edinburgh, said BAA was now keen to maintain the airport's expansion by cutting charges because of falling UK traffic.

Ryanair currently operates only two routes out of Edinburgh, to Dublin and Shannon in Ireland, compared with 24 at Prestwick in Ayrshire, which has become one of its largest UK bases after it struck a very favourable deal with the airport. Ryanair already has more international routes from Scotland than any other airline.

Mr O'Leary said: "Edinburgh is clearly more expensive than Prestwick. We can't fly into Edinburgh for free, nor do we expect to."

He said BAA's takeover by the Spanish firm Ferrovial and new management at Edinburgh Airport had led to the deal.

He told The Scotsman Edinburgh would get a further two or three Ryanair routes next year, and up to 12 if the airline chose it as a base for aircraft.

He said Edinburgh was among five contenders to become bases, of which one or two would be selected next year.

Mr O'Leary claimed BAA had not offered Ryanair discounts on its charges in the past, but the new deal would result in rates falling as passenger numbers increased.

The Ryanair deal could be a sign of further expansion at Edinburgh by its rival, EasyJet, which was equally critical of BAA until it more than doubled its European routes from the airport to eight this summer. Andy Harrison, its chief executive, told The Scotsman in April the airline might double to eight the number of its aircraft based in Edinburgh if BAA cut its charges.

He accused the airport of failing to exploit "enormous opportunities" for tourism because of its high fees.

David Johnston, Edinburgh airport's managing director, said it would have sufficient capacity to accommodate the expansion.

He said more than £50 million would be spent doubling the size of the departure lounge, resurfacing the runway and expanding the check-in hall by extending the front of the terminal by 30ft.

This year, the airport passed Glasgow as Scotland's busiest and now handles nine million passengers a year. Mr Johnston said: "Ferrovial is keen on further expansion and Ryanair was an obvious target. There has been some discount involved."

Flyglobespan, which is among several airlines already operating on the Edinburgh-Alicante route, said it had loyal customers and was "confident our product will retain its appeal".

Ryanair will compete with Jet2.com to Pisa and Lufthansa to Frankfurt. However, the German airline flies three times a day to the city's main airport, while Ryanair will operate only three flights a week to Frankfurt Hahn airport, which is 70 miles to the west. It already flies to both that airport and Marseilles from Prestwick.

The new Edinburgh routes were among 50 announced by Ryanair across the UK yesterday.

HOT SPOTS FLYING HIGH

• ALICANTE: The gateway to the beaches of the Costa Blanca is one of Spain's fastest-growing cities thanks to its status as a tourist mecca and being at the heart of the second-homes boom.

• BREMEN: The northern German city and former Hanseatic trading port is now a major centre for the space and hi-tech industries. It is also the home of Beck's beer and its famous sons include music legend James (originally Hans) Last.

• FRANKFURT: Germany's financial capital is situated in the country's second-largest conurbation, whose nicknames include Mainhattan, after its river.

• MARSEILLES: France's largest commercial port vies with Lyons as the country's second city, and provides ready access to Mediterranean beaches. Famous on the big screen in films such as The French Connection.

• PISA: Synonymous with its leaning 183ft, 12th-century bell tower, Pisa provides an entry point for the many Scots Italians visiting relatives in Lombardy, while the tourist magnet city of Florence lies nearby.