Budget carriers easyJet and Ryanair are both threatening to withhold part of the airport charges they pay at Gatwick and Stansted respectively following operator BAA”s price rises which came into effect at the beginning of the month.
Fierce rivals in the market, the two airlines share a fury at the Civil Aviation Authority”s (CAA) recent decision to allow a 21% rise in charges at Gatwick and 7% increase at Stansted, and are challenging it through a judicial review.
In the interim, easyJet CEO Andy Harrison has asked BAA to accept a deferral of the charge, in case the court rules in favour of the airlines ” ”In that situation, the excess would be returned to us so that we in turn could find some way to return it to our passengers,” he wrote in a letter to BAA CEO Colin Matthews.
”We will hold back a proportion (the amount is to be agreed) of the ”6.97 you have been permitted to charge for each passenger at Gatwick. We will keep the money in a separate account. To the extent that our challenge fails, we will hand over the money withheld to you along with any interest accrued. If our challenge succeeds, and a lower charge is then set, we will implement a mechanism to return what we have saved to our customers.”
He said a court decision might be months away, and that easyJet ”would prefer to do this in collaboration with you [BAA].”
BAA said in a statement it is aware of easyJet”s legal challenge, but it would continue to charge in accordance with the CAA”s decision.
Ryanair said yesterday (15 April) it too will launch a judicial review and withhold the latest [charge] increases unless BAA Stansted stops imposing the maximum-allowed price increases set by the regulator.
Ryanair CEO Michael O”Leary said: ”The CAA is an incompetent and incapable regulator which has yet again put the financial needs of the Spanish owned BAA airport operator above the interests of airport users and consumers.
”There is no obligation on the BAA monopoly to increase its prices up to the maximum permitted cap. Yet again, passengers at Stansted are being forced to pay significantly higher airport charges for the dubious pleasure of being stuck in long security queues, never-ending passport queues and [suffer] repeated baggage belt failures.”
A CAA spokesman told ABTN it has received a letter from easyJet regarding this but has not received any judicial papers from lawyers as yet.
Since the system of CAA price caps began in 1986, never has an airline challenged the regulator”s decision like this, but he said: ”We would vigorously defend any action, and we stand firmly by our price cap announcements of 11 March.
”We”re confident we”ve performed our duties, and done the job given to us by Government.”
BAA would not comment further at time of writing, but the CAA spokesman said the new charges came into force as of 1 April and that ”normal laws of contract would apply ” it would be up to BAA to decide what to do if a customer doesn”t pay.”