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Friday 27 October, 2000

Civil Aviation Auth.

Publication on Airport Review

Civil Aviation Authority
27 October 2000


A second paper covering the possible approaches for airport charges controls at
Heathrow, Gatwick, Stansted and Manchester Airports to apply from April 2003 was
published today by the Civil Aviation Authority.

Today's paper outlines the CAA's approach to the economic regulation of the
airports and a work programme for the reviews. It follows the Issues Paper
published in July which outlined the key areas that the CAA considered needed to
be addressed. It reviews the responses to the July paper and covers how the
CAA's initial thoughts have been developed.

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.

A full version of today's publication, 'The CAA Approach to Economic Regulation
and Work Programme for the Airport Reviews', is available on the CAA Website:,uk.  The document includes a short executive summary.

For further information contact Chris Mason on: 0207 7453 6026.

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

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.


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