The CAA say their proposals are tailored so each airport remains globally competitive and deliver the a level of service to passengers that matches expectations in the 21st century. The CAA challenges the airports to operate more efficiently.
The CAA's proposals are as follows : Heathrow
Heathrow has called for a 4.6% annual real-terms increase in its charges over five years. Its airlines have asked for a 9.8% per year cut. We propose a price control that will not allow prices to rise by more than inflation (measured by RPI).
Gatwick has set out a series of price commitments to its users, with the average price to grow by RPI + 0.5% per year for seven years. The CAA has today published its detailed analysis that suggests that this is a fair price.
In addition, we believe that the airport’s commitments are in passengers’ interests, so they are the basis of our final proposals.
Final decisions on market power, economic regulation and final licences for those airports found to have market power will be published in early 2014.
Airlines operating out of London Gatwick and London Heathrow have been responding to the new airport charges outlined by the Civil Aviation Authority today. Craig Kreeger, Chief Executive of Virgin Atlantic, welcomed reduction at Heathrow but was disappointed the CAA did not go further.
Coupled with ever increasing Air Passenger Duty, passengers flying to and from the UK are facing some of the highest travelling charges in the world. Virgin say the CAA must use this consultation period to review its proposals and ensure charges are reduced at both airports.
easyJet have also given their view this morning. They said they are disappointed with the proposed charges of RPI +1% and believe the move is being driven by capital expenditure that "doesn't provide value for money for passengers and an unreasonably high cost of capital."
British Airways head Willie Walsh says he will put pressure on the Civil Aviation Authority to reconsider its plans for prices at London Airports.
Mr Walsh said that under the CAA's new remit, Dame Deirdre Hutton and the CAA board should protect customers and ensure that they got a better deal.
Mr Walsh went on: "The Gatwick proposals, which will result in a significant increase in charges, are completely unjustifiable, totally unacceptable and directly contravene the CAA's new remit to represent customers' interests.
"The CAA must not be allowed to fail again. In line with its new remit, (CAA chairman) Dame Deirdre Hutton and the CAA board should protect customers and ensure that they get a better deal.
"We will make strong representations to Dame Deirdre and the board to reconsider this proposal."
Willie Walsh, chief executive of British Airways' parent company IAG, has spoken out strongly against the levels of charges at Heathrow. Responding to the CAA proposals today, he said:
Gatwick has been campaigning to be free of CAA regulation saying it was a move to protect passengers when the British Airports Authority controlled Heathrow and Stansted as well.
It wants to be free of being told how much it can raise prices for passengers to use the airport.
This has been rejected. The airport argues the money spent to having to deal with the CAA would be better invested in the airports and could cut costs.
The CAA disagree but today Gatwick say the small rise in fees suggested will not give it the money it needs to improve the airport for passengers.
In a statement Gatwick Airport said: "We believe this price level is based on unrealistic CAA assumptions, including on traffic growth, efficiency gains and financing."
The amount passengers pay to pass through Heathrow is to fall in real terms the Civil Aviation Authority has just announced but at Gatwick it will rise.