The UK Civil Aviation Authority is seeking to extend by one year its existing five-year price control plan for London's Heathrow and Gatwick airports.
The five-year plan was put in place on 1 April 2008, when the CAA set the maximum charge for Heathrow at £12.80 ($20.60) per passenger. The increased cap for each of the following four years was set at a maximum of 7.5% plus the rate of inflation.
At Gatwick, the maximum charge was set at £6.79 per passenger, with the annual maximum charge for the subsequent four years to rise by 2% plus inflation.
The current price control plan for the two airports is scheduled to expire at the end of March 2013, but the CAA wants to keep it in place for another year to enable it to develop the next price control plan "in line with reforms to the framework for economic regulation planned by the Government".
The new framework under consideration, which would initially apply to Heathrow, Gatwick and London Stansted, would allow "more proactive and responsive regulation tailored to the circumstances of each airport, not just developing a one-off settlement every five years", says the CAA.
It adds that because the timetable for implementing the reforms has yet to be decided, it will not be able to develop its price control proposals in April as it normally would. Therefore, the regulator is "asking stakeholders whether it ought to best manage these risks by extending the current price control periods by one year".
The charging structure drew widespread condemnation from UK carriers when it was unveiled in March 2008 because it meant that charges at Heathrow and Gatwick increased by 23.5% and 21%, respectively, in 2008-09 compared with 2007-08.
Source: Air Transport Intelligence news