BAA runway subsidy battle

BAA is reportedly squaring up for a battle over whether it can subsidise the expansion of Stansted airport with money raised at Heathrow and Gatwick. Current CAA rules state that any increases in capacity at a specific airport has to be self-funded and based on the economic viability of that particular airport. But BAA’s chief executive Mike Clasper is reported to have stated that passengers at Heathrow and Gatwick may have to help finance the Stansted expansion, as they would ultimately benefit from it. He reportedly told The Independent: “The people who should pay are the airlines that use Stansted but we also believe passengers across London will also benefit from a new runway at Stansted.” While the CAA reportedly stated that it would consider such a departure from the rules if there was “compelling evidence” that it was beneficial to passengers, airlines were not so keen. Sir Michael Bishop, chairman of bmi British Midland, reportedly told The Independent: “I can promise that we will fight such a threat every step of the way,” while Virgin’s Sir Richard Branson said he was “totally opposed to cross-subsidisation”.