BAA's London airports are a step closer to following the pioneering example of Australia's Sydney and Melbourne airports in being able to raise charges under a new regulatory regime.
The UK Civil Aviation Authority (CAA) says that price caps on charges should be raised, and that BAA can move away from the "single till" concept under which revenues from retailing are counted as subsidising aeronautical fees.
"Congestion on Heathrow and Gatwick runways means increases in permitted airport charges are likely to result in better use of those airports, with consequent benefits for passengers," notes the CAA. The UK proposals follow new guidance from ICAO giving airports the opportunity for more flexibility in their charging. Airlines fought the change at the global level without success, but continue to fight national causes. Virgin Atlantic managing director Steve Ridgway said the approach "will lead to an increase in landing fees, rising 6% per year in real terms over the next five years".
BAA broadly welcomed the CAA's recommendations, in particular that charges can rise faster at London Heathrow as it enters a period of heavy investment in the airport's newly approved fifth terminal.
Airports generally would like to see regulators adopting a "lighter touch" over charges, says Airports Council International economics director Paul Behnke, who believes the Australian and UK cases give a positive signal for other nations to follow suit.
Under the CAA's proposals, the cap on fees for the five years through to 2008 would be set at £6.35 ($9.20) per passenger at Heathrow, £4.65 at Gatwick and £5.40 at Stansted. That compares with actual charge revenues for the 2000/1 fiscal year of £5.23 for Heathrow, £4.06 for Gatwick and £4.36 for Stansted.
Source: Airline Business
