BAA to sue Ryanair for £1m

AIRPORTS operator BAA is today suing Ryanair over £1m of unpaid landing fees in an action that could end up costing the nofrills carrier an extra £26m a year.

A spokeswoman for BAA, announcing the action, said: 'Basically, airlines have to pay their bills.

'We wouldn't normally take a major customer to court. This is an option of last resort.î

BAA said that it was also ending the current agreement with Ryanair under which the airline pays £2.80 per passenger as part of a subsidy scheme by BAA for new airlines and new routes.

Ryanair is currently qualified for the discount until 2007 but if the agreement is cancelled, those charges will rise to £4.89.

With 12.5m Ryanair passengers passing through the airport each year that could add £26m a year in fees.

'They have repudiated their contract, which means they will no longer enjoy the current discounts on landing fees,' BAA's spokeswoman said.

But Ryanair boss Michael O'Leary immediately responded that he would take action against BAA for overcharging and said the airport owner could not renege on the discounts, which were part of a binding contract.

'We are issuing our own proceedings-against BAA for overchargingon fuel levies at Stansted over a 12-year period,' a spokeswoman for the company said.

Ryanair has largely been responsible-for Stansted's rapid development.

The airport recently announced that it had handled 20m passengers in a year for the first time, a 7% increase. About 60% of these were Ryanair passengers.

The airline's purchase of Buzz last year secured its position at the airport.

But Ryanair and BAA have been at odds for weeks over charges - mainly fuel levies - which the Irish carrier says are unfair.

BAA insists the levy on fuel prices is standard policy to cover rising costs and that Ryanair's issue should be with the oil companies.

Ryanair said there were other issues which it would air at a Press conference today. They are likely to include complaints by Ryanair that BAA's redevelopment of Stansted has been far too expansive.

The airport is getting a new runway and terminal at a cost of £200m, which Ryanair claims should cost a tenth of that. O'Leary accuses BAA of 'pissing money away'.

Ryanair is also likely to respond by announcing plans to shift some of its operations to Luton, the home of its traditional low-cost rival easyJet.