A second runway at Stansted Airport will not open till 2017 at the earliest due to a slump in passenger forecasts.
The Civil Aviation Authority has followed a recommendation from the Competition Commission that a background of “deteriorating economic and financial conditions” meant the second runway would not be needed until 2017 at the earliest, two years later than proposed by BAA.Monthly traffic volumes at Stansted, the UK’s third-largest airport, have been falling year on year for 12 months in succession, and are forecast to continue declining.
According to the Financial Times, the CAA is excluding the £2.3bn project from the price control regime till March 2014. This means BAA will have no funding from higher charges to finance development work until a new price regime is introduced in six years.
A planning investigation into BAA’s construction proposal is scheduled next year. However this could be derailed by a change of ownership at Stansted.
The CAA said on Tuesday it was proposing to freeze charges - the per passenger levy on airlines - at Stansted for both 2009-10 and 2010-11, with a small increase of 1.6% above inflation in the subsequent three years.
BAA told the FT it was “disappointed” that a significant element of its spending to date on preparing for the Stansted expansion had thus been ruled out. “We will continue to press for a regulatory framework which reflects the full cost of bringing forward the second runway proposals at Stansted,” it said.
The CAA proposals were welcomed by low-cost carriers Ryanair and easyJet, the two largest operators at the airport, which have been campaigning hard to keep capital spending at the airport in check and passenger charges down.
Yesterday the CAA said it would also impose fines on Stansted similar to those at Heathrow and Gatwick if BAA failed to meet agreed standards.