Airlines attack Gatwick's 'new deal' plan

Airlines attack Gatwick's 'new deal' plan

Airlines have criticised Gatwick’s ‘new deal’ plans to remove regulator control over take off and landing fees as an “exercise in smoke and mirrors”.

EasyJet, the biggest carrier at the airport, led the attack and was supported by the British Air Transport Association (Bata) and British Airways.

Gatwick, puting forward a business plan for 2014-20, argued the airport would raise fees by just 1.3% above inflation a year after an initial price adjustment.

This compares with the 3.3% real terms rise Gatwick believes would be necessary under the current regulatory system. The rise was needed to fund a £1 billion investment.

The airport said yesterday: “Competition in London and the southeast is set to increase and so it is critical that Gatwick be able to continue improving the quality of its service offering.

"Gatwick is therefore proposing to put forward an investment of a further £1 billion in the airport between 2014 and 2019 to build on the improvements delivered to passengers over the past three years.”
“The airport’s chief executive Stewart Wingate argued: “Our proposed new deal for Gatwick moves that competition judgment on further, and is a better deal for airlines and their passengers than a regulatory outcome.

“Free from regulation, we would be able to respond more quickly to the changing needs of airlines and their passengers and we would be able to step up the pace of improvement in the passenger experience.

"The deal means airlines and passengers win on price, service and the quality of facilities."

But easyJet, which carries around 35% of Gatwick passengers, warned: “Without regulation passengers face the risk of higher charges.

"EasyJet can see no justification for the price increases proposed by Gatwick which, rather than keeping costs low, represents an increase of around 60% over five years.

“The airlines at Gatwick believe that the improvements outlined could be delivered with a decrease in charges of RPI minus 9% every year over the five year period.

“Gatwick Airport's so called ‘new deal’ is simply smoke and mirrors and these proposals don't provide value for money for passengers.”

The view was echoed by Bata chief executive Simon Buck, who said: "We do not believe it is in the passenger interest as it does not offer value for money.

He added: “Gatwick's charges to airlines have increased by almost 50% over the past five years.”

The announcement proposes a further increase approaching 50% over the next regulatory period, while claiming this is a value for money proposition, said Buck.

“We do not accept their arguments and reject their aim of deregulation as this is not in the interests of the travelling public.

“We call on the Civil Aviation Authority robustly to protect the interests of the consumer by retaining the economic regulation of Gatwick, Stansted and Heathrow airports and using its regulatory powers to ensure there is a real term reduction in airport charges applied during the next regulatory period.”

BA told the Financial Times: “The airport’s charges over the past five years have risen by 56% ... [they] should be reduced significantly and we hope that the CAA ensures a fair settlement that works in the best interests of passengers using Gatwick Airport.”


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