BMI lashes regulator over sky-high Terminal 5 rates

BMI, the airline chaired by Sir Michael Bishop, has accused its regulator of a "dereliction of duty" over the decision to allow an increase in charges at Heathrow airport.

BMI, the airline chaired by Sir Michael Bishop, has accused its regulator of a "dereliction of duty" over the decision to allow an increase in charges at Heathrow airport.

In a letter to the Civil Aviation Authority (CAA), BMI questions its decision to force airlines to fund the construction of Heathrow Terminal 5.

Developed by airports authority BAA, the £4bn terminal will be used by British Airways, while BMI and Virgin Atlantic will be forced to use older Heathrow facilities.

BMI is now in detailed negotiations with BAA over the issue. But it has warned that it will take BAA to court if a compromise cannot be reached. BMI is now extending that threat to the CAA.

BMI's letter says: "The CAA have fundamentally been in dereliction of their duty and have exposed themselves to a judicial review."

Peter McClymont, the industry and government affairs manager at BMI, said: "We are continuing discussions with BAA over the level of charges at Heathrow. We have a number of options available to us should those talks fail."

BMI is urging BAA to bring forward planned refurbishment work at the central terminal of Heathrow, which it uses.

A CAA source expressed surprise at BMI's letter. He noted that the recent regulatory review of BAA, which set the charges at Heathrow, was approved not only by the CAA but the Competition Commission.

The source said: "The reason we are consulting with the airlines now on the next regulatory review, which starts in earnest in 2006, is to allow them to be involved in the agenda at an early stage."