CAA unveils fresh airport charge plan

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The Independent Online

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.

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 £2bn but the low-cost airline Ryanair, one of Stansted's biggest operators, has said they could be built for less than £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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