Civil Aviation Auth.

Airport QuinQuennial Review

Civil Aviation Authority
5 December 2000


Three new discussion papers, covering issues surrounding the setting of airport
charges controls to apply from April 2003 at Heathrow, Gatwick, Stansted and
Manchester Airports, were published today by the Civil Aviation Authority.

Entitled The Use of Benchmarking in the Airport Reviews, Quality of Service
Issues and The Single Till and Dual Till Approach to the Price  Regulation  of
Airports, they are all available on the CAA website:

Today's papers follow the publication of papers in July and October.  In  July,
Issues for the Airport Reviews - Consultation Paper outlined the key areas that
the CAA considered  needed to be addressed in its  approach  to the economic
regulation of the airports. This was followed in October by The CAA Approach  to
Economic Regulation and Work Programme for the Airport Reviews. This  reviewed
the responses to the July paper and covered how the CAA's initial thoughts had
been developed. Both documents are available on the CAA website.

The CAA plans to refer the four airports to the Competition Commission in
December 2001 in order to set new conditions relating to airport charges for the
five years from April 2003.

Notes to editors:

The CAA is required by the Airports Act 1986 to set limits on user charges at
designated airports every five years. The designated airports are Heathrow,
Gatwick, Stansted and Manchester. As part of the process the CAA is also
required to refer the airports to the Competition Commission.

The CAA last referred BAA's London Airports (Heathrow, Gatwick and Stansted) to
the Commission in December 1995 and in October 1996 set a price cap from 1 April
1997 to 31 March 2002. Manchester was referred a year later, in December 1996,
and a price cap was set for the five years from 1 April 1998 to 31 March 2003.

In May 1999 the CAA extended the price cap for BAA's London Airports one year to
 31 March 2003 to allow it to take into account the Government's final decision
on BAA's planning application for Terminal 5 at Heathrow on the assumption this
would be published in late 2001. This means the CAA will review all four
airports and refer them to the Commission at the same time. New price caps will
be set for the five years for each of the four airports from 1 April 2003 to 31
March 2008.

The present charging formulae for Heathrow and Gatwick taken together is RPI-3
per cent and for Stansted, RPI+1 per cent. For Manchester it is currently RPI-5
per cent.