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Heathrow charges cleared for take-off

Today’s announcement by the CAA on its price regulation decision for Heathrow Airport is bad news for the UK’s international competitiveness and has angered the airline community, according to the Board of Airline Representatives in the UK (BAR UK).

Dale Keller, chief executive of BAR UK, said “Airline CEO’s will be reaching for their oxygen masks in the knowledge that they will be forced to pass on excessive airport charges to their customers for the next five years.

“Consumers have benefitted from intense competition between airlines, driven by major efficiency gains and razor thin margins. Yet the CAA’s new primary duty to consumers has failed its test flight by instead rewarding operating inefficiencies and excessive shareholder returns at the monopoly that is Heathrow. Following increases exceeding 300% over the past 11 years, the latest settlement allowing further RPI increases escalates costs to consumers and weakens the international competitiveness of the UK’s only hub airport.

"Meanwhile, Gatwick also enjoys the benefits of significant market power and airlines are concerned that proposed price commitments may not go far enough to protect consumers from profiteering.

“Airlines and their customers expect the government to apply the same economic reality they encounter every day to regulated airport charges, and its own air passenger duty, by calling time on some of the highest air ticket charges in the world.”

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