Stansted Price Caps Stay in Place

UK Rules Against BAA on Stansted Price Caps

By Reuters on 20 January 2008 in News

Runway charges for airlines at London's Stansted Airport will continue to be capped, the government said on Tuesday, a move that pleased the carriers but thwarted the ambitions of airport operator BAA.

BAA, owned by Spain's Ferrovial, said it still wanted the price caps removed but welcomed the government's support for a second runway there.
"In making my decision on Stansted, I have taken into consideration the fact that the airports in the south-east are now operating at almost full capacity," said Transport Secretary Ruth Kelly. "This is bad for passengers in terms of delays, congestion and lack of choice."

She said price caps were needed to protect passengers who had little choice of going elsewhere. But caps were lifted at Manchester Airport where competition from other airports is stronger.

Budget airline easyJet welcomed the move, but said airport regulation in the UK was "fundamentally flawed" and needed a rethink.

"Without regulation, customers would be at the mercy of a highly-indebted infrastructure owner seeking short-term profit maximization at the expense of air traveller," said easyJet Planning Director Andrew Barker.

Irish rival Ryanair said the airlines had lost faith in Britain's Civil Aviation Authority (CAA) after it recommended the caps be lifted.

"The fact that it was the CAA who proposed this crazy de-designation idea in the first place shows how completely out of touch they are," said Ryanair's Jim Callaghan.

"The only solution to the BAA monopoly is to break it up and allow each airport to develop additional capacity, which will enable them to compete with one another," he added.

The Stansted Airline Consultative Committee (ACC), which represents airlines, also said the CAA had abandoned its duties.

"While the CAA was busy attempting to de-regulate Stansted, BAA doubled passenger charges, which is driving traffic away from the airport and depriving consumers of choice," said Stansted ACC's David O'Brien.

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