CAA’s proposals do not address Heathrow cost issues

- Geneva, Switzerland

In response to the United Kingdom Civil Aviation Authority’s (CAA) initial price proposals for London airports, Tony Tyler, Director General and CEO of the International Air Transport Association (IATA) said:

“The CAA’s recommendation for a price cap of RPI -1.3% for the next five years is like prescribing a placebo to treat a very serious illness. Everybody recognizes the enormous potential to reduce costs to rebuild the competitiveness of Heathrow and London’s other airports. But with such a weak price cap, we are missing an opportunity to do something meaningful. Over the last decade, airlines continuously cut costs to survive, while the regulator allowed Heathrow charges to triple. Today’s proposal does not even begin to address Heathrow’s cost problems seriously.”

“Aviation is a strategic industry for the UK supporting some 1.4 million jobs and over GBP 70 billion in economic activity. But the toxic combination of government policies and decisions—high costs, restricted hub capacity and APD which is the highest aviation tax in the world—is eroding the UK’s status as Europe’s biggest aviation hub. That Heathrow is measurably more expensive than its European rivals is clear evidence. Efficiency gains which have already been identified by the CAA can close the competitiveness gap and give greater value to UK air passengers. The public consultation period should incorporate these into much more challenging but achievable cost reduction targets. That will benefit passengers, improve competitiveness, drive economic growth and generate jobs,” said Tony Tyler, IATA’s Director General and CEO.

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