Ryanair accuses Air BP of profiteering, urges UK’s economic regulator to probe

Ryanair accuses fuel supplier Air BP of profiteering, urges UK’s economic regulator to probe increased fuel costs

Ryanair, the budget airline headquartered in Dublin, Ireland, has requested Britain’s Office of Fair Trading (OFT) to investigate rises in price of aviation turbine fuel at Belfast City Airport and Glasgow Prestwick Airport in the United Kingdom.

The Office of Fair Trading is a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law and acts as the United Kingdom’s economic regulator.

Ryanair has complained that Air BP, with headquarters in London and one of the world’s largest suppliers of aviation fuels, “is attempting to impose monopoly increases of over 50% on the delivery cost of fuel at a time when inflation is under 5%.”

In a statement, Ryanair said that Air BP, which has a “complete monopoly” on the fuel at the airports, has not explained the rise.

Michael O’Leary, chief executive of Ryanair, said that Air BP is “profiteering” at Belfast City Airport and Glasgow Prestwick Airport and demanded that immediate action be taken by the OFT.

Ryanair, which its biggest operational base at London’s Stansted Airport, is Europe’s largest low-cost carrier and the third largest airline in Europe in terms of passenger numbers.

Air BP is one of the world’s largest suppliers of aviation fuels and lubricants for both turbine aircraft and piston-engined aircraft. The company currently supplies around 8 billion gallons of both aviation fuels and lubricants annually to its customers worldwide.

In a press release, Air BP defended its prices, and explained: “The prices are agreed upon by mutual negotiation and must reflect current market and cost environments. The company is confident that it has not breached any competition laws and is surprised by Ryanair’s decision to involve the OFT.”

However, Jim Callaghan, Ryanair’s director of legal and regulatory affairs, said in a statement: “Ryanair has repeatedly written to the fuel provider asking for an explanation for these rapacious increases, but Air BP had refused to provide any valid justification. Air BP has a complete monopoly on the supply of aviation fuel at Belfast City Airport and Glasgow Prestwick Airport, and is abusing this position to unilaterally impose over 50% cost increases (over 10 times the rate of inflation). This abuse comes at a time when BP and the other oil majors are making billion pound profits at the expense of the aviation industry, which is currently in crisis.

Despite repeated requests, Air BP has failed to provide any valid justification for these inflation busting increases.”

“Of the 150 airports from which Ryanair currently operates,” Jim Callaghan added, “Belfast City Airport and Prestwick Airport are the only two airports where Air BP has a monopoly and where the oil company is subjecting users to this kind of profiteering at a time of record oil prices and oil company profits. We are, therefore, calling on the OFT to take immediate action against Air BP.”

A week ago, Ryanair had announced that 400 of its pilots and cabin crew would be forced to take unpaid leave for week this winter as the budget carrier is curtailing flights from Dublin Airport and Stansted Airport.

Ryanair’s chief executive Michael O’Leary had also said that the airline’s executives were taking a pay cut of at least 10% owing to the severe financial difficulties in the aviation sector.