CAA’s price proposals for London’s airports: the battle begins as airlines go on the attack

It's a familiar story as we approach the next five-year regulatory period for airport charges at London's Heathrow, Gatwick and Stansted airports starting from Apr-2014. The airports seek big price increases, while the airlines want them cut and the Civil Aviation Authority (the regulator) tries to make proposals in the middle that displease both sides. A CAA-commissioned study shows that all three airports have significantly increased their realised airport charge yield over the past decade and are above the averages of their comparator airport baskets.

The CAA's initial proposals were met on 30-Apr-2013 with immediate howls of displeasure from airline chiefs describing the proposed Gatwick price increases as "completely unjustifiable, totally unacceptable", referring to Stansted's "absolute pricing power" and calling Heathrow "over-priced, over-rewarded and inefficient". For their part, the airports complained about "heavy handed regulation", fearing that the proposals "will put passenger service at risk by not attracting the necessary investment".