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CAA finalizes Stansted price controls, performance targets UK CAA announced its final decision on price caps at London Stansted for the next five years and confirmed that it will toughen performance targets, noting that under the new incentive scheme BAA could be forced to return up to £10 million ($13.8 million) per year if delivers "poor" service to passengers and airlines. Under the incentive regime, up to 7% of the charges from passenger flights at STN could be put at risk if standards of service at security queues, baggage systems, terminal facilities or those delivered directly to airlines are found lacking. A similar scheme at Heathrow and Gatwick has forced BAA to pay out nearly £9 million in rebates to airlines so far in fiscal 2008-09, CAA said. Conforming with its December proposal, CAA set the price cap for passenger flights from April 2009 until March 2014 at £6.53 per passenger for the first two years. The following three, the airport operator is allowed to increase the maximum revenue it can levy through airport charges to £6.63, £6.74 and finally £6.85 in 2013-14. "Stansted's price control is about ensuring that this airport, and those with the potential to compete with it, develop in a way that meets the needs of users," CAA Director-Economic Regulation Harry Bush said. "This is why we have brought in an incentive scheme to improve services for passengers and airlines". He added, "Going forward we will now be working on developing our approach to economic regulation to meet the challenges of a developing airport market and to ensure that the benefits of increased competition from the forthcoming sale of Gatwick, and from the potential sale of Stansted, are delivered to passengers and airlines". EasyJet described the new price caps as "the best of a bad bunch but it is still wrong," while Ryanair said the proposal to fine poorly performing airports "is too little too late after it has presided over years of abysmal service at Stansted and its history of rubber-stamping cost increases for airports." BAA said CAA failed to recognize a large element of its investment at STN in the price control ruling. "We are disappointed that a large element of the full cost of developing new capacity has been retrospectively disallowed," the operator said. "Looking to the long term, the regulator should not discourage future important investment which it accepts is necessary." (ATWOnline, March 16, 2009) BACK TO LATEST NEWS |
