Ticket prices to rise as airports get go-ahead to raise landing charges
Wednesday 12 March 2008
Air passengers are to be hit by rising ticket prices after it was announced yesterday that landing charges at the UK's two biggest airports are to soar.
The Civil Aviation Authority (CAA) was accused of caving in to pressure from BAA, which owns and operates seven British airports, after it emerged that the cost of landing at Heathrow could rise by 23.5 per cent next year, and 21 per cent at Gatwick.
Airlines rounded furiously on the CAA, saying it had failed to stand up to BAA over its demands for expensive upgrade work at the airports, both of which are routinely criticised for their poor facilities.
Virgin Atlantic, bmi, Ryanair and easyJet all insisted that airport regulation was failing. "Today's CAA announcement... clearly demonstrates that the system needs to be changed," said a joint statement. "These increases... will inevitably hurt consumers."
The CAA said BAA could increase the charges at Heathrow to £12.80 per passenger next year with subsequent annual rises of no more than 7.5 per cent above inflation. Gatwick charges are to rise to £6.79, with subsequent increases to rise no more than 2 per cent above inflation. While the carriers refused to indicate how much of the increase would be passed on to passengers, experts claimed that they would have little choice but to push up ticket prices.
The higher charges were "essentially paying for the modernisation of Heathrow and Gatwick", the CAA said, adding BAA would need to meet strict targets.
Paul Charles, director of communications for Virgin Atlantic, said the company would try to absorb the costs. "We operate in an area that is very competitive and you can't really raise prices. The US airlines do not face the same charging regime. All it does is make UK airlines uncompetitive," he said.
The four airlines support the break-up of the monopoly enjoyed over Britain's major airports by BAA, which was bought by the Spanish Grupo Ferrovial for £10.3bn 18 months ago.
"Not only does the current system... encourage BAA to over-build and gold-plate its airport facilities, but it also perpetuates the assumption that only one company is allowed to construct and operate every single aspect of the airport experience," the statement said.
The airlines also called for an overhaul of the regulatory system, public reporting of BAA's "failing finances", and for Transport Secretary Ruth Kelly to step in to resolve the CAA's "failings".
Despite being able to increase landing charges by more than the CAA had proposed last year, BAA was still unhappy with the announcement, insisting the authority had not taken into account the scale of work it was engaged in at Heathrow and Gatwick, which will cost £4.8bn over the next five years. The company has come under fire recently for long delays and missing luggage. BAA's ownership of airports is the subject of a Competition Commission inquiry.
Rising landing fees
86 per cent rise in charges, to £19.31 by 2013
49per cent rise in charges, to £8.36 by 2013
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