Ryanair slams the lifting of Stansted price cap

This story is sourced from Pro
See more Pro news »

Ryanair has criticised the UK Civil Aviation Authority’s decision to deregulate Stansted airport from April, saying it will harm competition and consumers.

The Irish budget carrier questions the CAA’s conclusion that Stansted no longer has “substantial market power” and its decision to allow the airport to set charges, which Ryanair argues could allow prices to be raised “without any reference to competitive price levels”, adding: “The CAA’s failure to recognise that Stansted has profitably maintained its prices above the competitive level since 2007, despite a 27% fall in traffic, confirms the [UK] Competition Commission’s finding that the CAA regulatory regime is ‘inadequate’.”

However, Stansted airport’s owner – Manchester Airports Group – points out that Ryanair will be unaffected by any price increase in the near future having signed a 10-year commercial agreement with them in September 2013.

It further states that commercial agreements have also been signed with EasyJet and Thomas Cook, meaning some 90% of the airport's traffic will be protected from price rises for years to come.

“The CAA has effectively given Stansted a licence to engage in inefficient capital expenditure and operations, which will result in irreversible damage to consumers for many years, even if the airport is re-regulated five or 10 years from now. Ryanair condemns the CAA’s continuing failure to effectively regulate Stansted,” says the airline.

Stansted previously had its airport charges capped by the CAA, which continues to regulate prices at Gatwick and Heathrow, deemed to have substantial market power.

However, the body began a consultation on the possible deregulation of Stansted in December 2012 after the government gave it new powers to be more flexible in its regulation of airports.