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Thursday 15 February, 2001

Civil Aviation Auth.

CAA Papers

Civil Aviation Authority
15 February 2001



                                             15 February 2001

AIRPORT QUINQUENNIAL REVIEW: CAA PUBLISHES MORE DISCUSSION PAPERS

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

The papers, Direct Contracting Between Airports and Users: A Default Price
Cap;

Competitive Provision of Infrastructure and Facilities Within Airports;
Economic Regulation and Incremental Costs, cover further key areas which the
CAA consider need to be addressed in its review of airport charge controls.
They are all available on the CAA website: www.caa.co.uk.

Today's papers follow the publication of six other discussion documents since
last July. They are:

  * July 2000: Issues for the Airport Reviews - Consultation Paper

  * October 2000: The CAA Approach to Economic Regulation and Work Programme
    for the Airport Reviews

013.01 /contd...

  * December 2000: 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

  * January 2001: Economic Regulation and Capital Expenditure.

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 that 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. For Manchester it is currently RPI-5 per
cent.


                                                                                
                                                                                
                                                                            

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