Air fares to rise over landing fees hike
- 00:02:31
- ITN
Air fares to rise over landing fees hike
Fares are likely to rise after airlines were told they will be charged substantially higher landing fees at the UK's two busiest airports.The fees, which have been slammed by British Airways, are higher than those proposed by the Civil Aviation Authority (CAA) last November.The airport authority cited additional investment at Heathrow and more airport security as reasons for the higher charges.The CAA said airport operator BAA can increase costs over the next five years with Heathrow to be charged 23.5 per cent more in 2008/09 and Gatwick 21 per cent.BAA, a unit of Spanish construction group Ferrovial, will be allowed to charge £12.8 per passenger during this period, and increase this amount by no more than retail price inflation plus 7.5 per cent for Heathrow in the subsequent four years.The annual rise for Gatwick will be no more than inflation plus 2.0 per cent a year, the CAA said.The aviation authority also ruled that BAA's rate of return on its investments should be no more than 6.2 per cent at Heathrow and no more than 6.5 per cent at Gatwick. This compares with a figure of 7.75 per cent for both airports that BAA had requested.But, British Airways said that to allow BAA to "ramp up airport charges significantly, demonstrates conclusively that the airport regulation system has failed".Paul Ellis, BA's airport policy and infrastructure general manager, added: "When BAA's new owners, Ferrovial, bought them, the CAA said they would not be influenced by Ferrovial's high debt levels."In practice, they have ignored their own policy and caved in to intense pressure from BAA by setting excessive price increases. Heathrow passengers will pay, on average, 17 per cent more than the Competition Commission recommended in September 2007."© Independent Television News Limited 2008. All rights reserved.
ITN | March 11, 2008
