Gatwick could hit BAA by poaching Ryanair from Stansted

Ryanair could shift many of its flights from Stansted to Gatwick if the Sussex airport's new owner lives up to promises to improve its services and keep charges down.

"It's wonderful to see the chief executive of a London airport finally talking about improving services and lowering prices," said Michael Cawley, chief operating officer of Ryanair.

He was responding to Gatwick chief executive Stewart Wingate's promise to compete against other London airports.

"We haven't seen this kind of talk since the early Eighties when the BAA was formed creating a monopoly. Certainly we are up for talking with Stewart — after all, Gatwick has had virtually zero growth for the last few years."

Mr Wingate used to run Stansted for BAA so knows Ryanair well. He was poached by Gatwick's new owners Global Infrastructure Partners — the operators of London City Airport — two months ago.

Ryanair flies 109 routes out of Stansted, 20 out of Luton and eight out of Gatwick.

The low-cost airline said Stansted was one of its most expensive operating bases in Europe, and the loss of Ryanair as the airport's largest customer would be a major blow to BAA.

Ryanair today upped its profit forecast for the year after fares fell less sharply than expected in its second half. The carrier now said it should make 275 million (£240.7 million) of profits in the year to March, compared to its previous, wide-ranging forecast of profits from 200 million to 300 million.

The airline's chief executive, Michael O'Leary, said it had benefited from the recent demise of competitors including Germany's Blue Wings, Scotland's FlyGlobespan and Italy's My Air: "We expect further casualties this winter."

Mr Cawley said: "There are certainly airlines in Spain, Scandinavia and Italy which would be seen as struggling. We also don't believe that Lufthansa is committed to the low-cost business of bmi — bmibaby — since its takeover."

Ryanair's losses in its third quarter to the end of December were drastically reduced from 101.5 million to 10.9 million which was much better than the City had expected. Its shares jumped 20 cents to 3.54.

Mr Cawley said: "We had been managing on the basis that fares would fall by 20 per cent in the third quarter, but in fact we are starting to see some recovery in Continental Europe, particularly France, Germany and Italy, so the fall was only 12 per cent. It's likely to be between seven per cent and 10 per cent in the final quarter as things gradually improve."

Passenger numbers rose by 14 per cent to 16 million in the third quarter, although revenues were only one per cent higher at 612 million. Fuel costs were 37 per cent down a year earlier.