Airport company BAA will have to pay fines if it lets customers down with poor service at Stansted, air regulators ruled today.

Rebates to airlines in the event of a bad performance by BAA are already in place at Heathrow and Gatwick airports, but have not applied at Stansted.

Today the Civil Aviation Authority (CAA) announced that BAA will have to pay rebates to airlines of up to 7 per cent of the money it charges carriers for using Stansted should its performance not reach set targets.

The rebate scheme has seen BAA's performance improve at Heathrow and Gatwick but in the period April-October 2008, the company still incurred a £4.3m penalty at Heathrow and a £3.6m penalty at Gatwick for falling short of standards set by the CAA.

The Stansted rebate scheme announcement came as the CAA proposed new charges to airlines at Stansted for the period 2009-14.

The CAA said the amount BAA can charge airlines should be capped at the equivalent of £6.34 per passenger for the period 2009-11 and then rise to £6.65 by 2013/14.

CAA economic regulation director Harry Bush said today: "Our proposed price controls protect passengers and airlines while 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."

A spokesman for BAA said: "Government and regulators agree that new runway capacity is required in the South East of England, to relieve pressure on airports and to provide better service to passengers and airlines.

"It should follow that the full cost of bringing forward that new capacity is reflected in the regulatory framework.

"While the CAA is supporting the cost of the second runway planning application, we are disappointed that a significant element of our spend to date has been disallowed.

"We will continue to press for a regulatory framework which reflects the full cost of bringing forward the second runway proposals at Stansted."