Budget airlines challenge airport fees
[16th April 2008]
Low fares airlines easyJet and Ryanair are threatening to withhold payment to BAA of landing fees at Gatwick and Stansted airports.
Industry regulator the CAA approved a 21% increase in fees at Gatwick airport from 1 April. In a letter to BAA chief executive Colin Matthews, easyJet CEO Andy Harrison writes:
“We will hold back a proportion (the amount is to be agreed) of the £6.97 you have been permitted to charge for each passenger at Gatwick. We will keep the money in a separate account. To the extent that our challenge fails, we will hand over the money withheld to you along with any interest accrued. If our challenge succeeds, and a lower charge is then set, we will implement a mechanism to return what we have saved to our customers”.
Rival low cost airline Ryanair is withholding payment of price increases at Stansted airport. Ryanair objects to what it says is a 107% increase in passenger charges at Stansted over a 12 month period.
“If BAA Stansted continues to abuse its monopoly power by imposing these maximum allowed price increases, then Ryanair will launch judicial review proceedings and it will withhold these latest increases (putting them in an escrow account) until the outcome of its judicial review proceedings at Stansted,” Ryanair says in a press statement.
Outspoken Ryanair boss Michael O’Leary fumes: “T5 doesn’t work, Stansted airport doesn’t work, the BAA airport monopoly doesn’t work in the interests of consumers, and it’s now time that the Competition Commission and the British Government broke up this foreign owned, failed, anti consumer monopoly, and got rid of the incompetent, ineffective CAA regulator”.
It appears that withholding landing fees at airports is a breach of contract so it will be interesting to see how this story develops.
Written by: Nick Purdom
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