Virgin Atlantic Airways today gave a mixed welcome to the Civil Aviation Authority’s announcement on its review of BAA London airport charges. Steve Ridgway, Chief Executive of Virgin Atlantic, commented:
“Virgin Atlantic is pleased that the CAA has decided to retain the `single till` approach to airport regulation. This is a triumph for common sense, a vindication of the Competition Commission’s views and a real victory for the airlines. We are also pleased that the CAA is proposing a clawback of over £500m of capital expenditure ‘prefunded’ by airlines and intended for Terminal 5. We also welcome the proposal that airlines should receive rebates from BAA if service standards are not met.
“However, we are extremely disappointed that the level of charges proposed by the CAA for Heathrow will increase to RPI +6.5% per year. This means an increase in charges by around 40% over the next five years. These increases are wholly unjustified - calculations based on BAA’s own figures show that all of BAA’s capital expenditure including T5 could be funded without any increase in charges. It is difficult to see how the airlines can avoid passing these extra costs onto passengers.”
Virgin Atlantic will study the full detail of the CAA’s proposals before submitting its formal response.