January 23, 2008 / 1:48 PM / 11 years ago

UPDATE 1-Ryanair increases baggage, check-in charges

(Adds detail, background, share price)

DUBLIN, Jan 23 (Reuters) - Irish airline Ryanair (RYA.I) said on Wednesday it would raise charges for checking in baggage at airports with immediate effect as part of a cost saving drive aimed at coaxing more passengers to travel with hand luggage only.

Europe’s biggest budget airline (RYA.L), which has become one of the world’s most profitable airlines by cutting costs and seeking sources of revenue other than ticket sales, has tried to slash overheads at airports.

“Ryanair remains determined to encourage more and more passengers to travel with carry on luggage only, which allows them to use our free of charge web check-in,” Peter Sherrard, the airline’s head of communications, said in a statement.

The carrier said it would raise the fee for transporting baggage in the hold of the aircraft to 6 pounds ($11.74) from 5 pounds. The cost to passengers of checking in at the airport rather than online will rise to 3 pounds from 2.

For those paying in euros, luggage charges will rise 50 percent to 9 euros ($13.16) per bag from 6 euros and the airport check-in fee will increase to 4 euros from 3.

Sherrard said the increase would not be the last and will continue “over time” until it reached a target of 50 percent of all passengers travelling with hand luggage only. Ryanair did not disclose the current take up rate.

“This will in turn allow us to reduce the number of airport check-in desks that we rent and the handling staff we employ so that we can continue to pass on these handling savings,” he said.

Ryanair’s shares have fallen 18 percent since the start of the year amid fears of rising energy costs and the company’s limited fuel hedging for its business year starting April 2008.

The company's shares were trading 4.25 percent lower at 3.83 euros by 1320 GMT, underperforming a 1.0 percent fall on the wider Irish market .ISEQ. The stock was 4.7 percent weaker in London where the FTSE 100 .FTSE was down 3.2 percent.

Reporting by Jonathan Saul; editing by Rory Channing

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