Only 24 hours after reporting a profit jump of 19% to …
Only 24 hours after reporting a profit jump of 19% to £637m, BAA has dropped a bombshell on the UK airline industry by announcing a further raid on its customers – charges at Stansted Airport will increase by almost 300% and passengers at Heathrow and Gatwick will be expected to chip-in up to £1 per passenger to pay for it.
easyJet and Ryanair, which between them account for almost 80% of Stansted`s passengers, have always argued that it is necessary to develop Stansted Airport – providing the infrastructure meets the needs of Stansted`s customers. This means constructing a new runway and associated terminals that are fit for low-cost airlines. It doesn`t mean building a long-haul airport capable of taking an A380 with marble-lined terminals to match.
Today, BAA has informed a number of people, but not yet its airline customers, that it intends to increase charges from the current level of around £2.89 to up to £8 by 2008 to pay for an airport which will now not open until 2013 at the earliest. It also said that it will seek a “contribution” of up to £1 from passengers at Heathrow and Gatwick to pay for Stansted – despite the Civil Aviation Authority`s view that the development should be financially self-supporting. British Airways, bmi and Virgin Atlantic have previously threatened legal action if BAA attempted to cross-subsidise.
BAA has gone about this completely the wrong way. It has not yet consulted its airline customers on these incendiary plans and only a couple of weeks ago the Civil Aviation Authority (CAA) announced that it had fallen at the first hurdle and was going back to the drawing board on BAA`s plans to spend over £100m on initial planning for expansion at Stansted.
easyJet and Ryanair will now be calling on the CAA to force BAA to scale back its plans and only build what its customers are prepared to pay for.
As BAA has today admitted, if Stansted Airport were to be independently owned and financed it would never be able to afford something on the scale that BAA is proposing.
Ed Winter, easyJet`s Chief Operating Officer and Chairman of the Stansted Airport Consultative Committee, said: “BAA`s has today announced the Great Consumer Rip-Off and it should send a shiver down the spine of every airline passenger in the UK. It is planning to build a folly on the grandest scale that is unnecessary and unwanted. Before sensible low airport charges attracted the likes of easyJet to Stansted, it was little more than a white elephant in an Essex field with a single runway; BAA seems determined to make it a white elephant in an Essex field with two runways.
“Today it has added insult to injury with is plans to fleece up to £1 from passengers at Heathrow and Gatwick to pay for the development of Stansted. As such BAA clearly holds in contempt the CAA`s edict that each of BAA`s three London airports should be treated as self-financing, stand-alone, independent businesses.
“So the CAA must now stick to its guns and force BAA to only build at Stansted what its users are prepared to pay for. If the CAA can`t guarantee this, then the BAA`s ownership of the three main London airports should be broken-up.
“BAA must not be allowed to kill the goose that lays the golden eggs.”
David O`Brien Ryanair`s director of Operations said: “The proposals by the BAA airport monopoly to blow £4bn on a second runway which even they confirm should cost only £200m is just the latest example of the gold-plating rip-off of consumers practised by the BAA airport monopoly. Ordinary passengers should not be forced to pay higher air fares just to finance another BAA Taj Mahal. Ryanair will continue to fight – with easyJet – for lower cost airports and lower fares.”
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
