Fares fear as UK airports raise charges

The UK Civil Aviation Authority (CAA) was today expected to announce above-inflation increases in landing charges at three major UK airports - heightening fears of an accompanying rise in air fares.

Fees imposed on airlines that use Heathrow, Gatwick and Stansted could rise by as much as 40% over the next five years.

Airlines are opposed to the rise, but airport operator BAA – which runs the three sites – says charges are comparatively low and that increases are needed to fund airport infrastructure improvements.

For the last five years the annual increase in landing charges has been set below the rate of inflation at both Heathrow and Gatwick and only 1% above at Stansted.

Virgin Atlantic Airways spokesman Paul Moore said an increase in costs would have to be reflected in their fares.

“Frankly, we are sceptical about this money going on infrastructure improvements. BAA has made huge profits over the last couple of years, while airlines have been struggling financially,” he said.

“BAA has got more than enough money for its investment programme. The airlines will get nothing out of this formula deal except that our costs will go up.

“The tragedy is that the current pricing formula has worked well. There was no need to change it.”

A BAA spokeswoman said: “We plan to invest £8.1 in airports over the next few years and airlines have said they are keen to see these improvements.

“Our charges are far lower than nearly all those at other international airports.”

The CAA announced its proposed charges in March this year and the deal has since been scrutinised by the Competition Commission.

As well as announcing its proposed capping levels – which will take effect for five years from April 2003 – the CAA will also publish a report from the commission on the future regulation of the airports.

Heathrow, Gatwick and Stansted, together with Manchester, are the only UK airports where charges are fixed by the CAA in this way.

Charges at other airports are sorted out in deals between the airport operators and individual airlines.

An announcement on new charges at Manchester – where current annual increases are set at a below-inflation level – is expected soon.