News: Airlines to play hardball over increased airport charges
Flights > News > # 1755 (16/04/2008)
Ryanair and Easyjet are threatening to withhold a portion of the airport charges imposed by airport operator BAA at London Stansted and Gatwick respectively while they challenge the fee increases in court.
Last month, regulatory body the Civil Aviation Authrority (CAA) gave the green light for BAA to raise charges at Gatwick by 21% to £6.79 per passenger from April 1 as part of its price control decision for Heathrow and Gatwick for the five-year period ending March 31, 2013. It currently is undertaking a price control review for charges at Stansted from April 1, 2009. Under the current five-year price cap regime, BAA is allowed to increase charges to £6.65 per passenger this year.
Easyjet said it intends to withhold part of the price increase at Gatwick pending the outcome of a judicial review. Easyjet chief executive, Andy Harrison, said: “We will keep the money in a separate account. To the extent that our challenge fails, we will hand over the money withheld to you along with any interest accrued. If our challenge succeeds, and a lower charge is then set, we will implement a mechanism to return what we have saved to our customers.”
“We are determined to address a regulatory decision which we consider to be unlawful and damaging for the airlines, our passengers and the industry as a whole.”
EasyJet gave BAA until the end of today to respond. "If we cannot reach agreement, easyJet will need to consider what arrangements it may be able to put in place without BAA said it will continue to charge in accordance with the CAA’s decision.
Ryanair is considering a similar move over price hikes at Stansted. A letter from the no-frills airline to BAA said the proposed 7% increase in passenger charges was “completely unjustified, coming as they do on the back of a 100% increase in passenger charges imposed by BAA in April 2007”.
The letter continued: “If BAA Stansted continues to abuse its monopoly power by imposing these maximum allowed price increases, then Ryanair will launch judicial review proceedings and it will withhold these latest increases (putting them in an escrow account) until the outcome of its judicial review proceedings at Stansted.”
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