Air passengers are being promised lower-than-planned price rises following aviation regulators’ decisions on just how much airlines are charged by London’s three main airports over the next five years.
At Heathrow, the Civil Aviation Authority (CAA) has ruled that the charges, to take effect from April, will be lower than it first proposed and lower than Heathrow bosses wanted.
At Gatwick, the CAA has not fixed a price as such and will base its regulation of the West Sussex airport on the airport’s own commitments to its airline customers.
However, the CAA’s economic overseeing of affairs at Gatwick assumes a fair price for airline charging lower than Gatwick bosses had put forward under a seven-year plan.
Equating the charges to the consumer, the effect of today’s ruling is that airport charges per passenger at Heathrow would fall in real terms from £20.71 in 2013/14 to £19.10 in 2018/19. Heathrow’s own alternative business plan would have seen charges rise to £25.72 in 2018/2019.
At Gatwick, the management’s own seven-year plan would have seen charges per passenger remain, at 2014 prices unchanged at £8.80.
Under the CAA fair price assessment, the prices would equate to £8.07 per passenger in 2018/19.
Heathrow, Gatwick and Stansted are currently the only airports which are “regulated” by the CAA which means, among other things, the amount they can charge airlines is capped.
Today, the CAA ruled that from April Stansted will not longer be regulated, freeing the airport, owned by MAG (Manchester Airport Group) free to negotiate freely with airlines over charges.
CAA chairman Dame Deirdre Hutton said today’s rulings were “good news for air passengers” who would “see prices fall, while still being able to look forward to high service standards”.
Also for the 2014-19, there will, for the first time, be a requirement for Heathrow and Gatwick airports “to put in place robust plans to ensure they are better prepared for disruption and can manage it effectively when it does occur”.
But Heathrow chief executive Colin Matthews said the CAA has been “draconian”, adding that bosses at the west London would now have to see whether their investment was “still financeable”.
Serious flooding which caused a power outage at Gatwick led to severe disruption to flights on Christmas Eve.
Earlier this week Gatwick chief executive Stewart Wingate, appearing before the House of Commons Transport Committee, apologised for the problems saying more “could and should have been done” to help passengers.
Today, responding to the CAA ruling, Mr Wingate said he was disappointed “at the intrusive nature of the CAA’s monitoring requirements” and with the CAA view that Gatwick still needed to be regulated.
MAG welcomed the decision to deregulate Stansted, but Ryanair said the Stansted ruling would increase charges resulting in “yet more damage to UK consumers and competition”.
British Airways said the CAA had “made a step in the right direction” over Heathrow charges but added that passengers would still be paying more than is than is warranted”.
EasyJet , one of the airlines that suffered from the Christmas Eve problems at Gatwick, welcomed the decisions over Gatwick and Stansted .
It said it was now “up to Gatwick to show that this more commercial approach can deliver lower charges and improved service for airlines and their passengers”.
Under the five-year Gatwick ruling, the CAA will scrutinise most costs associated with a possible second runway at the West Sussex airport “before they can be passed on to airlines and passengers”.
Virgin Atlantic Airways said the Heathrow ruling was “a far cry from the reduction needed to mitigate the incredibly steep price rises customers have seen in Heathrow charges in the last few years”.
The airline added that the CAA had “not gone far enough” at Gatwick, saying the passenger experience at Gatwick “can be improved with a more significant reduction in charges”.
It said: “We hope the CAA will properly hold Gatwick Airport and its shareholders to account in order to improve its price offer to its airline customers.”