04 November 2008

Stansted acted against public interest, say competition chiefs

The Competition Commission is recommending that maximum airport charges at Stansted rise to Ã&#pound;6.56 per passenger in 2009/10.

In a report released today, it recommends that charges subsequently increase by no more than retail price index (RPI) inflation plus 1.75% each year, reaching a maximum of Ã&#pound;7.05 per passenger in 2013/14.

This compares with projected charges for 2008/09 of Ã&#pound;6.34 per passenger.

The Civil Aviation Authority will now consider the recommendations and carry out further consultation before making its final decision in March 2009.

The Commissionââ¬â¢s report follows a six-month inquiry, which was requested by the CAA under the Airports Act 1986.

Competition chiefs also found that Stansted Airport had acted against the public interest in February 2002 to April 2008 by:

- failing to consult properly with airlines on the development of the airport and its capital expenditure plans

- failing to manage as effectively as possible the security queuing process

- failing to offer appropriate landing charges for larger cargo aircraft.

The Competition Commission said the CAA must ensure BAA improves the consultation process and introduce a service quality rebate scheme, similar to those already in place at Heathrow and Gatwick, which impose financial penalties if airports fail to meet standards.

BAA should also offer off-peak discounts on landing charges for the largest cargo aircraft, it said.

However, the Commission said it did not agree with Ryanairââ¬â¢s claim of excessive pricing at Stansted.

Based on the Commission's recommendations, the CAA will issue its own price control and other proposals for Stansted Airport by December 9 and then put these out for an eight-week consultation.

New price controls are due to come into effect at the airport for the five-year period starting April 1.

EasyJet said it welcomed the recommendations and congratulated the Commission for its "clear-headed analysis".

ââ¬ÅâœTodayââ¬â¢s report sets out categorically what we have known for some time - that there are significant failings in BAAââ¬â¢s approach to consultation. BAA has kept airlines in the dark on too many major decisions, but has expected us to pick up the bill for its excesses," it said in a statement.

ââ¬ÅâœLast year, the CAA chose to ignore the CCââ¬â¢s recommendations with regard to pricing at Gatwick Airport ââ¬' a decision that is now the subject of a Judicial Review claim by easyJet. We urge the CAA to listen to the CC this time at Stansted - and put the interests of the travelling public above those of BAA.ââ¬~

The Competition Commissionââ¬â¢s full report is available here:
http://www.caa.co.uk/default.aspx?catid=78&pagetype=90&pageid=10232



By Bev Fearis

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