Ryanair to cut Budapest routes in airport fees row

BUDAPEST Thu Nov 22, 2012 12:37pm GMT

Passengers board a Ryanair plane parked at Girona airport, September 20, 2012. REUTERS/Albert Gea

Passengers board a Ryanair plane parked at Girona airport, September 20, 2012.

Credit: Reuters/Albert Gea

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BUDAPEST (Reuters) - Budget airline Ryanair (RYA.I) is to cut the number of routes it operates from Budapest by a third from next year, it said on Thursday, in reaction to an increase in airport charges.

The move comes just months after Ryanair set up a base at Budapest following the collapse of Hungary's national airline Malev.

Chief Executive Michael O'Leary, who has said financial problems among flag carriers in Europe offers a major growth opportunity, said the cuts would be made after airport operator, Hochtief HOTGn.DE raised its user charges.

"The strange logic of Budapest (airport) and Hochtief seems to be, 'we have less traffic so we charge the existing traffic more'. That recipe is doomed to failure," O'Leary told reporters at a news conference in the Hungarian capital.

Ryanair moved into Budapest in February with five aircraft based there now plans to cut that to three and close 10 of the 30 routes operated from Budapest from January 10. The airline said this would result in a 40 percent fall in Ryanair's passenger traffic at the airport to 1.2 million per year and would lead to the loss of 800 local jobs.

Ryanair has previously cut routes from other airports where it has wanted lower airport charges but the company is not considering pulling out of Hungary altogether, O'Leary said.

Ryanair said the number of its flights from Budapest would fall by 110 to less than 170 per week as it would also be cutting the frequency of its flights on nine of the 20 remaining routes.

(Editing by Greg Mahlich)

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