Poor service penalties proposed for Stansted
Stansted owner BAA faces the prospect of financial penalties for poor passenger service levels at the airport.
The company would have to pay rebates to airlines of up to seven per cent of the amount of revenue charged if it lets customers down due to poor service, according to new Civil Aviation Authority proposals.
The idea is along similar lines to service quality and rebate schemes designed to help improve the passenger experience at BAA owned Heathrow and Gatwick.
It comes as part of CAA price control proposals for Stansted. The authority claims they are designed to enable competition to develop over time between airports in the South East and further afield, and encourage airport development in the right place and at the right time for passengers.
The CAA said its proposed price caps for Stansted are lower than those suggested by the Competition Commission “to reflect an adjustment to take account of airport charge revenues from cargo and other non-passenger flightsâ€.
Price caps will be set at £6.34 per passenger for the first two years, and will then rise to £6.65 by 2013/14 (consistent with annual increases of RPI +1.63 per cent for the final three years of the control).
This would “ensure that both Stansted and other competing airports can take forward efficient plans for expansion to meet demand from passengers and that competition in the airport market is encouraged,†according to the CAA.
Group director of economic regulation Harry Bush said: “Our proposed price controls protect passengers and airlines whilst maintaining good levels of service. They also look to the long-term potential expansion of airports.
“The price control, which allows the same revenue for BAA as put forward by the Competition Commission, will enable charges to increase in coming years to allow Stansted or competing airports to build new capacity as and when warranted to meet passenger demand.â€
In the light of a recommendation from the Competition Commission that the costs of building a second runway at Stansted should be excluded from the price control, the CAA said it will will set in hand work towards an improved regulatory approach to enable efficient expansion to meet demand in a more competitive market.
by Phil Davies
Phil Davies
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