Valencia takes on Ryanair - and loses

The dramatic decision by Ryanair to close its Valencia base in south-eastern Spain, while emphasising its formidable muscle in Europe, has produced no winners.

This is a first for the Irish low-fare airline, which prides itself on never having closed a base, but one it surely would have preferred not to have had to make. The loss of a substantial part of an eventual investment of €140 million ($180 million), which will now be diverted to another base yet to be announced, will hurt, but probably not quite as much as the immediate disappearance of 750,000 passengers and more than 250 jobs from Valencia airport and the knock-on effect for tourism on the increasingly popular Costa del Azahar (pictured is Valencia's famous bullring). 

Ryanair announced its Valencia base in August 2007 and stated that it has been responsible for the bulk of the growth at the airport over the past two years. This year, the airline projects it would account for 25%, or 1.5 million passengers at the airport.

But it says it lost patience after the continued refusal of the Comunitat Valencia to engage in constructive discussions in relation to the promotion of the airport and the routes across Ryanair's network in Europe. While telling Ryanair that no funds were available for such co-operation, it apparently gave €12m worth of marketing support to local airline, Air Nostrum.

Ryanair's deputy chief executive, Michael Cawley, bemoaned the negative attitude encountered by the Valencia authorities, adding: "This is a very black day for the airport of Valencia and the city and region it serves. Ryanair had begun to transform this once overlooked region of Spanish tourism into a powerhouse of growth and development.

"Ryanair has already shown the possibilities which are uniquely available through its low fares, and this without any assistance or co-operation from the local tourism board. However, the naked subsidisation of competitor airlines at the expense of Ryanair ... has meant that continuation of our base at the airport is untenable."

Ryanair will  maintain limited operations to Valencia, but the Comunitat Valenciana may have killed the goose that lays the golden egg.

Other secondary European airports, which may be tempted to tangle with Ryanair, take note.