Britannia, Thomas Cook, First Choice, MyTravel and Monarch Airlines, who together form the Charter Airline Group of the UK and fly over 31m passengers a year, have raised serious doubts over the viability of a new runway at Stansted.
The concern centres on the proposed funding for the new runway. In a joint letter to BAA Plc, who own Stansted, the Department for Transport and the Civil Aviation Authority, the CAG have objected to paying higher fees at Gatwick and Heathrow in order for the proposed ”4bn new runway to be constructed.
Recent events at Stansted involving Ryanair and their refusal to pay landing fees to the BAA have raised serious doubts within the industry that BAA will be able to fund the development of the new runway without cross subsidisation from other London airports.
Managing director of Monarch Airlines Peter Brown said "We believe Stansted should only be developed if the users are willing to pay for it. We see no evidence that BAA can pay for this runway without cross subsidisation and we are left to make the conclusion that cross subsidy is the only way left to raise the money. Until this can be otherwise adequately demonstrated, work should continue on the case for a third runway at Heathrow and a second runway at Gatwick, the latter option being unconstrained by the environmental problems that plague Heathrow."
Kevin Hatton, MD of Britannia, added "If Ryanair, who make up 63% of the traffic at Stansted, won't pay their current landing fees then what hope have the BAA got of raising the cash through increasing charges to fund a ”4bn development? We don't want to see our fees increased at other BAA airports to fund a white elephant that has little industry support. We support the Government's decision to expand airport capacity in the southeast but firmly believe development should only go ahead if the BAA can show that Stansted users are willing to pay for the new runway and they will not have to resort to cross subsidy. The white paper clearly states that new capacity should be paid for by airport users."
Stansted, as a major passenger airport, was opened by the Queen in March 1991. This followed a government realignment of airport resources and a privatisation which saw BAA finish up with seven airports and a virtual monopoly in the London area. BAA plc invested ”400m into Stansted, the funding, so the argument goes, coming from Gatwick and Heathrow. If the Charter Airline Group is questioning the expansion what happens when the bigger scheduled operators get into the act? Are BA and BMA going to be happy to pay for the expansion of Stansted for the benefit of others. The Go endeavour showed that British Airways was not interested in Stansted. BAA can of course go to the City, perhaps sell an airport. Or it can ask the Stansted operators to fund the extension. Interesting times ahead. With Sir Michael Bishop up in arms over the funding and use of Heathrow T5 BAA looks like it is in for a battle on a series of fronts.