BA and Ryanair to cut capacity

By Andras Gergely and Paul Sandle

DUBLIN/LONDON (Reuters) - Ryanair (RYA.I) and British Airways (BAY.L) will cut flights next winter due to the rising cost of fuel which is threatening to wipe out their profits this year, the two companies said on Tuesday.

Ryanair (RYA.L), Europe's biggest budget airline, said it would cut weekly flights at Dublin by 12 percent this winter and it would also cut some at Stansted in the UK.

Separately, British Airways (BAY.L) said it expected to reduce capacity by 3 to 5 percent in its winter season.

BA chairman Martin Broughton said the airline is looking at extra fuel costs this year of more than 1 billion pounds, which is more than last year's record profit of 875 million pounds.

"I don't want anybody to be under any illusions that in the current operating conditions, it will be a considerable achievement for British Airways to break even this year," he said at the company's annual shareholders' meeting (AGM).

The British flag carrier will cut flight frequencies but it will not cut any long-haul routes, Chief Executive Willie Walsh told reporters at a press conference after the meeting.

But he added there could be "one or two" short-haul suspensions in the plan, which will be finalised in the next fortnight.

Ryanair, which made a net profit of 481 million euros in the year to the end of March, said its guidance was unchanged for this year.