COLIN BAKER LONDON
As Ryanair prepared to announce its first base in mainland Europe, word had already got out that it was to be Brussels South Airport near the small Belgian town of Charleroi.
Ryanair was not due to make an official announcement before the start of March. However, reports in Belgium, since confirmed by local sources, suggested that the Irish low-cost carrier will operate two aircraft from Charleroi. The airport blames Serge Kubla, Walloon minister for economics, for letting slip to local media that Ryanair had chosen the Belgian airport. Meanwhile, Kubla's office says he was forced to respondto pilot gossip.
Four airports were believed to be in the running for the choice of a first continental hub to add to Ryanair's Dublin, London Stansted and Glasgow Prestwick operations. In addition to Charleroi, these were Frankfurt Hahn, Stockholm Skavska and Paris Beauvais, all currently served by Ryanair.
The runners-up may not have long to wait, however, as Ryanair is already considering a second continental European base. Frankfurt Hahn was seen as the most likely choice for the first operation by most analysts, and must be among the favourites again. Observers say that the choice of Charleroi was likely to have been determined by the financial package on offer to Ryanair, which has traditionally negotiated very competitive airport charges.
The choice of Charleroi is a further blow to budget airline Virgin Express and struggling flag carrier Sabena, both based at Brussels Zaventum.
It is widely assumed that there is room for only one low-fare airline out of Brussels, which adds further uncertainty to the future of loss-making Virgin Express. Sabena's problems, meanwhile, are just as serious (see page 23). "The scope for a commercial response from Sabena or Virgin Express is not great," says John Mattimoe, analyst at Dublin-based Merrion Stockbrokers. Meanwhile, Belgian carrier CityBird's tentative plans for low-cost services from Liège may also be affected.
Meanwhile, Ryanair raised e116 million ($107 million) from its latest share offering, placing 10 million shares at e11.60 each. In addition, the airline's chief executive Michael O'Leary sold 3 million shares.
The share offer was four times over-subscribed, prompting lead managers Morgan Stanley and Davy Stockbrokers to exercise their option to offer a further 1 million shares, while O'Leary is selling the same amount. Following the sale, O'Leary will hold 7.16%of Ryanair's issued share capital.
Source: Airline Business
