CAA allows higher airport charges

The Civil Aviation Authority has granted BAA the right to increase airport charges by up to 23.4% from 1 April 2008.

The details of the price controls issued today allow charges of a maximum £12.80 per passenger during 2008/09 at Heathrow, an increase of £2.44 on a like-for-like basis.

At Gatwick the passenger charge maximum is £6.79 per passenger during 2008/09, an increase of 21% in real terms.

The CAA says it recognises the increase in charges is significant but the higher charges are to fund the modernisation of both Heathrow and Gatwick.

The CAA has revealed that the charges at Heathrow will fund the capital and operating costs for Terminal 5 which comes into service on 27 March 2008 and  the construction of Heathrow East Terminal by 2013. At Gatwick the charges will fund the redevelopment of the South Terminal and a new baggage system.

The regulator has confirmed a range of financial incentives are being introduced which will provide rebates for bad service and bonuses if BAA reaches it targets.

Dr Harry Bush , CAA Group director, economic regulation said: “Passengers and airlines deserve better than they have been provided at Heathrow and Gatwick in recent years. However, the resulting improvements in airport facilities and service standards – some £5bn of investment over the next five years and a halving of security queuing times- have to be paid for in increased charges.

“But airlines and passengers need to be sure they are getting enhanced facilities and services that they are paying for. Hence the CAA’s emphasis on greater financial incentives – with BAA being penalised a lot more if it fails service standards and earning bonuses if they exceed them.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.