British Airways disappointed in CAA's Airport Charges Proposal

British Airways has expressed its disappointment about  the UK's Civil Aviation Authority proposal to raise charges at London Heathrow airport by inflation plus 4-8% each year between 2008 and 2013.

Paul Ellis, British Airways general manager airport policy, said, “Airport charges will increase by 50% during the current five year charging period yet passengers have yet to see an improvement in facilities and service. To advocate another 50% rise over the next five years cannot be justified.”

The airline said that charges should increase no faster than inflation during the next five years with a lower cost of capital and greater operating efficiency.

The CAA has proposed a lower cost of capital at 6.2%. The airline believes that BAA can make the infrastructure investment needed at Heathrow with a cost of capital set at 5.6%.

In addition, the CAA says that it has assumed that BAA can achieve a 1% operating efficiency each year.

Paul Ellis said, “We welcome plans for improved investment at Heathrow but passengers deserve world class facilities and excellent service levels without a further hike in charges. The 1% efficiency improvement is not a challenging target and BAA should be pushed further and faster to become more efficient.

“We also believe that robust service quality standards should be backed by higher financial compensation payments to ensure that the investment delivers a better experience for passengers.”

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