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Budget airline easyJet announced today it is to cut flights from Luton by 20 per cent and move its base after a row over higher landing charges.
The company started out at Luton in 1995 and refers to it as its "spiritual home" but easyJet said Luton "failed to recognise the commercial realities of the recession" and claimed costs had risen by a quarter in the past three years.
Sources close to the discussions said charges already made up about 10 per cent of the average easyJet fare from Luton and further rises would make ticket prices uncompetitive.
EasyJet said flights to and from Luton up to the end of the year would be "wholly unaffected".
The carrier will move its aircraft to more profitable airports. It indicated these were likely to be on the Continent, where some airports have scrapped tourist taxes or reduced charges to zero.
EasyJet said its intention was to redeploy as many staff as possible, but that it would discuss reducing the number of flight crew at Stansted, Belfast, Bristol and Newcastle, with up to 40 employees affected.
The company insisted it was still on track to achieve growth of 7.5 per cent a year as airlines struggle during the recession.
Ryanair, easyJet's main rival, recently dropped 90 per cent of its flights from Manchester because of higher charges. It also cut routes from Stansted and Dublin because of costs.
EasyJet's chief executive, Andy Harrison, said he was "deeply disappointed" that Abertis, the airport's Spanish operator, and its owner Luton council did not take "a more far-sighted approach which would have protected jobs".
"We are one of only a few airlines expecting to make a profit this year," he said. "A critical part of our success has been optimising the allocation of our aircraft across our 19 European bases. This means responding to airports with uncompetitive costs.
"At a time when jobs are under threat in the town the airport should be an engine for growing employment, not a source of further unemployment.
"This can only happen, however, if the owner and the operator make the right commercial decisions and deliver a competitive cost base. We have decided to move our assets to markets with better long-term potential."
Mr Harrison went on to criticise the Government for raising airport passenger duty, saying it hit regional airports hardest and increased the pressure on airlines to move aircraft to mainland Europe.
"The Government seems to think that airport passenger duty is a free lunch. It isn't. It costs jobs," he said.
