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Published on Wednesday, September 18, 2013

CAA waivers on decision to keep price controls at Stansted

Stansted may escape continued regulation by the Civil Aviation Authority after the announcement this week that it has reached a long-term deal with Ryanair to double the airline's traffic from the airport over the next 10 years.

The CAA  has now agreed to defer making final proposals on the future regulation for Stansted from April 1 next year. These were due to be published on October 3.

The CAA had provisionally concluded earlier this year that if the airport were fully-deregulated it would abuse its power and increase airline charges, but since the sale of Stansted to Manchester Airport Group  (MAG) it has reached long-term deals with airlines, first with easyJet and earlier this week with Ryanair.

The two agreements mean that over 90% of Stansted's business would be covered by long-term deals that set airport charges, although the CAA said it had not been advised that contracts with Ryanair and easyjet have been finalised.

Under new powers granted to the CAA last year, a market power test is required as part of the process to decide whether an airport should be regulated in the future and if so, how.

When the CAA published a consultation for Stansted's market power in January, which closed at the end of May, it acknowledged that one uncertainty that could alter its view would be if the change of ownership of Stansted established different behaviours and relationships with the airlines.

It said this week:"Following the Ryanair deal and another agreement between MAG and easyJet announced earlier this year, the CAA will issue a consultation to invite stakeholders to submit representations on how these agreements may affect the market power assessment."

The announcement does not affect the publication of the CAA's final proposals for future regulation at Gatwick and Heathrow, which will still be published on October 3.

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