Virgin to appeal against CAA’s decision over airport charges

Sir Richard Branson’s Virgin Atlantic is considering an appeal against the decision by the UK Civil Aviation Authority (CAA) over airport charges, The Travel mole has reported.

Virgin Atlantic CEO, Craig Kreeger, said that the airline was ‘baffled’ at the CAA’s decision in October, which suggested that prices rise in line with inflation.

The statement comes after the CAA published its final decisions on economic regulation at Heathrow, Gatwick and Stansted, to be effective from April 2014, offering passengers lower prices and high service standards. At Heathrow, the CAA’s price control decision will see prices fall in real terms by 1.5 percent per year between 2014 and 2019. The changes are introduced after passenger traffic forecasts strengthened from October, and the cost of capital has been revised.

Kreeger said: ‘Today’s decision is a far cry from the reduction needed to mitigate the incredibly steep price rises customers have seen in Heathrow airport charges in the last few years. Prices at Heathrow are already triple the level they were 10 years ago, and coupled with ever increasing Air Passenger Duty, customers flying to and from the UK are facing some of the highest travelling charges in the world.

‘Virgin Atlantic is totally committed to improving the passenger experience at Heathrow, but we believe this could have been achieved with a more significant reduction in charges. We will be carefully considering our right to appeal on behalf of our passengers who will ultimately pay the price for the CAA’s decision.’

With a regulation based on the airport operator’s own commitments to its airline customers, the CAA is backing the commitments with a licence, to allow itself to step in to protect users if there are reductions in service quality that are against the passenger interest.

Virgin also accused the CAA of laxity with its regulation at London Gatwick.

‘We hope the CAA will properly hold Gatwick Airport and its shareholders to account in order to improve its price offer to its airline customers,’ said Kreeger.

‘If it fails to do so, coupled with looser regulatory controls, we are concerned that the CAA is failing in its statutory obligation to protect passenger interests, and will consider our right to appeal on their behalf,’ he added.