From today's Scotsman:
EasyJet boss on the attack over Luton
Andrew Murray-Watson
THE chief executive of budget airline easyJet has attacked Vinci’s attempt to take control of Luton Airport, warning the French giant was "living in cloud cuckoo land" if it expected to retain current airport handling fees.
Vinci’s £516 million hostile bid for Luton airport owner TBI is conditional on a settlement being reached with easyJet on passenger and baggage handling terms "no less favourable" than the current contract.
The no-frills operator is currently locked in talks with TBI to reduce the £5.50 landing charge and 50p baggage handling charge its levies for every easyJet passenger passing through the airport.
Speaking to The Scotsman, easyJet chief executive Ray Webster categorically stated that Vinci had "clearly not been briefed on the seriousness of the situation".
He added: "We have made our position quite clear all along.
"We agreed this current interim deal under sufferance, because we had little option.
"We have mothballed further investment at Luton until landing charges are reduced and infrastructure improved.
"Clearly this is not going to be plain sailing and if Vinci thinks it can get an improved deal it is clearly living in cloud cuckoo land."
He said that capacity would be taken away from Luton unless easyJet received an improved offer in a move that could pave the way for more routes from Edinburgh and Glasgow airports.
Webster’s remarks hit TBI’s share price. At close yesterday its stock was trading down 2p, or two per cent, at 96p as investors weighed the risks of Vinci’s bid failing.
The airport operator’s share price had reached 100p on Wednesday as speculation mounted of a counterbid after TBI said it had received expressions of interest from unnamed parties.
Merrill Lynch analyst Marcus Curley said that easyJet’s comments did not necessarily mean Vinci, the world’s largest construction company, would withdraw its offer.
"Even if they signed an agreement which is below the current terms that gives Vinci an out, it doesn’t mean that they will withdraw their bid because they just want to make sure that there is some protection," he said.
Commenting on the current £5.50 landing charge, the easyJet spokesman added: "We said in our prospectus last year that we thought 550 pence as a base rate was totally unacceptable. We’ve said it to anybody who will listen and we’ve said there will be no further growth out of Luton if we are forced to a deal at that amount.
"But Vinci obviously haven’t done their homework on easyJet and its history of paying landing charges at Luton if they expect to get more," he said.
Vinci, which unveiled its 90p per share offer on Wednesday, said it was unconcerned about the easyJet comments.
A spokesperson for Vinci said: "These negotiations have nothing to do with Vinci. They are between easyJet and TBI."
TBI has already rejected Vinci hostile bid as inadequate.
The operator also owns Belfast airport, Cardiff, Sweden’s Skavasta, three Bolivian airports and Florida’s Orlando Sanford.
It lost almost one-fifth of its value two weeks ago, after warning profits would be hit by BMI British Midland’s withdrawal from Belfast.