British Airways is extremely disappointed that the Civil Aviation Authority is proposing to raise charges at London Heathrow airport by inflation plus 4-8 per cent each year between 2008 and 2013.Paul Ellis, British Airways general manager airport policy, said: “Airport charges will increase by 50 per cent during the current five year charging period yet passengers have yet to see an improvement in facilities and service. To advocate another 50 per cent rise over the next five years cannot be justified”.

The airline says that charges should increase no faster than inflation during the next five years with a lower cost of capital and greater operating efficiency.

 

The CAA has proposed a lower cost of capital at 6.2 per cent. The airline believes that BAA can make the infrastructure investment needed at Heathrow with a cost of capital set at 5.6 per cent.

 

In addition, the CAA says that it has assumed that BAA can achieve a one per cent operating efficiency each year.

 

Paul Ellis said: “We welcome plans for improved investment at Heathrow but passengers deserve world class facilities and excellent service levels without a further hike in charges. The one per cent efficiency improvement is not a challenging target and BAA should be pushed further and faster to become more efficient.

 

“We also believe that robust service quality standards should be backed by higher financial compensation payments to ensure that the investment delivers a better experience for passengers.”

 

The airline will continue to lobby the CAA and the Competition Commission during the consultation on airport charges over the next twelve months.

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