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CAA sets out consultation over Stansted price controls
The Civil Aviation Authority is publishing a consultation on the framework and options for price regulation at Stansted.
The review will lead to new price caps on charges at the airport from April 2009.
The CAA said its role is to set a price control for the five years from April 2009 against a background which includes the possibility of major investment at the airport in a second runway and associated infrastructure; disagreement between the airport and its users about the nature, timing, scale and cost of that investment; and the scope the CAA sees for regulation of Stansted to affect other airports and their users.
The authority is consulting on a wide range of options for price caps.
One option is an adaptation of the existing ‘building block’ method. Two options have evolved from ideas put to the CAA by airlines. Two further options represent “safeguard” caps designed to recognise the competitive circumstances in which Stansted operates, and to enable funding of new investment in additional airport capacity, whilst still providing an additional safeguard for users against unreasonably high prices, according to the CAA.
Group director of economic regulation Dr Harry Bush, said: “We fully accept the Secretary of State’s decision that Stansted airport should continue to be price-regulated, and welcome her acknowledgement that the decision to continue to designate Stansted airport was not intended to constrain the CAA from adopting new approaches that meet its statutory duties while avoiding some of the costs of the current system.
“Against this background, our job is now to develop proposals that are proportionate, taking into account the market power held by Stansted Airport; do not prejudice the commercial position of other, competing airports; and encourage the efficient investment in capacity that passengers in the market want.
“The consultation we have begun today represents a first step in the process of developing an appropriate framework and price cap proposals for Stansted. We welcome views on them.”
The document, ‘Price Control Review – Consultation on the Framework and Options for the Economic Regulation of Stansted Airport’ is available at:
www.caa.co.uk/docs/5/ergdocs/stanstedconsultation_jan08.pdf
by Phil Davies
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