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Friday July 25, 2008
Reuters
European No-frills Airlines Face More Security Costs

Tighter airport security from this week will force Europe's low-cost airlines to rethink baggage and check-in policies and may inconvenience travelers enough to deter them from jetting off on weekend breaks.

Airlines banned hand luggage on all flights out of the United Kingdom on Thursday, causing chaos at airports as security was stepped up following a foiled plan to bomb transatlantic planes.

Analysts said the new rules might undermine a recent push by low-cost carriers Ryanair and easyJet to reduce costs by encouraging passengers to bring only hand luggage onto planes and check in online.

Travelers also may decide to stay at home if air travel becomes more inconvenient, particularly at London's congested airports.

"If this hand baggage policy stays in place for a long time, will that affect the way people think about a quick weekend break because suddenly it becomes more of a hassle?" Exane BNP Paribas airline analyst Geoff van Klaveren asked.

"EasyJet and Ryanair have made fantastic strides over the past year to make travel less of a hassle with online check-in and hand luggage. Suddenly if you have a two-hour check-in process, it makes you think twice."

Higher airport costs may be partly offset by increased sales of in-flight drinks and snacks. Passengers are banned from bringing liquids on board under the security measures.

"Ideally, a gradual relaxation (of security) starts, with liquids likely to be banned for some time on boarding. If so, higher on-board drink sales need to be accommodated," Goodbody Stockbrokers analyst Joe Gill said.

A Ryanair spokeswoman said it had no plans to change its baggage policy, because it was unclear how long the ban on hand luggage would be imposed. It was relaxing luggage charges for the time being.

Ryanair wants to halve airport queues and shave EUR30 million euros (USD$38.3 million) off costs by getting passengers to check in online and bring only hand luggage. The airline introduced charges of up to GBP5 (USD$9.50) for check-in baggage earlier this year.

Rival easyJet removed weight restrictions on its hand luggage last year.

Low-cost flights have tight turnaround times and rely on getting passengers on flights fast to maintain schedules.

"This will raise the cost of baggage handling and slow down the turnaround time for the plane as well," said analyst Chris Tarry at UK-based aviation consultancy CTaira.

Flight schedules began returning to normal on Friday after mass cancellations on Thursday, but airlines warned of delays.

Authorities banned liquids and gels from bags being carried on to aircraft, and travelers with babies were forced to taste their baby food before boarding.

Airport operator BAA said the new security measures were in place indefinitely, although analysts expect them to be gradually wound back.

Analysts said they did not expect the fear of an attack to deter travelers in the longer term. There was a minimal impact on travel following bombings on London's transport system in July last year.

(Reuters)

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