"British regulator unveils fresh airport charge plan"

Wednesday, May 12, 2004

CAA unveils fresh airport charge plan
United Kingdom - The Independent


BRITAIN'S MAIN aviation regulator is to encourage airport operators and
airlines to agree in future between themselves the level of charges
needed to pay for new facilities and improved services at the country's
four regulated airports.

Agreement between the two parties will be particularly important when it
comes to the new runway and terminal which the Government has ordered
for Stansted airport. BAA has costed the facilities at pounds 2bn but
the low- cost airline Ryanair, one of Stansted's biggest operators, has
said they could be built for less than pounds 200m.

The change in regulatory approach by the Civil Aviation Authority
follows the outcry over the 40 per cent increase in charges it allowed
the airports operator BAA to impose on airlines at Heathrow at the last
regulatory price review in 2003.

Some carriers at Heathrow such as bmi British Midland are still
threatening to take BAA to court over the increase, which will see
landing charges at the west London airport rise by 6.5 per cent a year
in real terms until 2008 to help pay for Terminal 5.

The CAA is proposing that when the next airport charging review begins
there should be "prior engagement" between BAA and its airline customers
to agree on the levels of capital and operating expenditure needed to
ensure a given level of service. This would then be fed into the
regulatory process, rather than the CAA proposing a new set of charges
and asking for responses.

Apart from Heathrow and Stansted, there are two other UK airports where
landing charges are regulated - Gatwick and Manchester.

Harry Bush, group director of economic regulation at the CAA, said: "The
CAA believes there should be more scope for commercial negotiation
between airports and airlines."

Mr Bush denied this would result in the CAA simply rubber-stamping
proposals by airports and airlines. He said the regulator would still
need to guard against airports and their existing airline customers
clubbing together to restrict expansion and raise prices to the
disadvantage of passengers and new entrants.


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