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Last Updated: Tuesday, 15 August 2006, 11:31 GMT 12:31 UK
Terror curbs spook budget airlines
Michael O'Leary, Ryanair
Ryanair boss Michael O'Leary is keen to avoid restrictions

With many hand luggage restrictions still in place following last week's terror alert, many low-cost airlines have good reasons to fear for the future.

Both the remaining size restrictions and the ban on everyday items such as toothpaste and drinks bottles run counter to efforts by budget airlines to make passengers carry more of their own baggage stuff in order to both speed up turn-around times between flights and to reduce luggage handling costs.

Such concerns spurred Ryanair boss Michael O'Leary to tour television studios on Monday, pointing out inconsistencies and calling for a swift return to the way it used to be prior to 10 August.

"Surely common sense would suggest that if the safety and security of British citizens is under threat, why has the government not banned luggage, liquids and gels on the London Underground or on the Eurotunnel?" he said.

Reduced advantage

In Mr O'Leary's opinion, "the way to defeat terrorism is for the government to show leadership and return air travel in Britain to normal" - a move that would also help to protect the bottom line of both his and other budget carriers.

Industry observers say his plea is unlikely to be met with action, with some predicting that at least some of the new hand luggage restrictions will remain in place for a long time, perhaps forever.

Hand baggage dimensions

This would hit all airlines hard, though budget carriers such as Ryanair and Easyjet would probably suffer more than most, according to industry analyst John Mattimoe of Merrion Stockbrokers in Dublin.

Mr O'Leary and other budget carrier executives should be concerned about efforts to reduce the size of hand luggage to about half what is currently permitted, insists Mr Mattimoe.

"If that size is going to be commonplace going forward, at a minimum it will take away the advantage the low-cost airlines are trying to seek," he said.

On one level, hand luggage restrictions are frustrating recent efforts by budget operators to make passengers themselves carry more of their luggage from the check-in desk to the planes.

"Low cost airlines, and Ryanair in particular, have been very active in recent months in encouraging passengers to check in less luggage and carry more luggage onboard," Mr Mattimoe said.

"The less baggage they have to get third-party handlers to put in the aeroplanes, the less cost for those airlines."

Delays and costs

Continuing restrictions would imply increased check-in baggage volumes, and thus higher costs.

Luggage trolley
Passengers carrying less luggage
Longer turn-around times
Rising security costs

In addition, it slows things down.

"If they'll have to load more and more bags onto the planes, that might mean longer turn-around times," said Mr Mattimoe.

Asking passengers to check in early is unlikely to help, he added, since this would mean staff would have to work longer hours, thus also pushing costs higher.

Increased security measures may also lead to increased airport charges, which would ultimately lead to higher costs for airlines that may be passed on to passengers.

Budget airline passengers are more price sensitive than those paying more for a broader level of service with traditional airlines, so again the budget carriers - and their customers - would feel the pinch the most.

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