The Worlds Leading Airport Company

Date 04.03.2011

BAA has today welcomed news that the government is to move swiftly to reform economic regulation of airports.

Transport secretary Philip Hammond today published a statement saying the government would proceed with updated regulation early in the “next [parliamentary] session”.

The current statute is now 26 years old and it doesn’t encourage collaboration. BAA believes this is one of the reasons for fall-outs between airports and airlines, for example, when baggage is delayed passengers don’t care if it’s the airline, airport or ground handler’s fault – they just want better service.

To make this happen, regulation has to support sustainable investment and incentivise all parties to work together and focus on the things passengers truly care about

Emma Gilthorpe, Heathrow’s director of regulation, said:

“We’re encouraged by the minister's announcement around improving the way airports are regulated.  Not only will the new framework enable the CAA to explore more targeted approaches to regulation, it also has the potential to encourage greater collaboration between airports, airlines and other parties to deliver a better experience for passengers and above all secure sustained investment in vital national infrastructure."

In today’s written ministerial statement, Philip Hammond, secretary of state for transport, said:

[http://www.dft.gov.uk/press/speechesstatements/statements/hammond20110303]

“In the Queen's speech the Government announced its intention to reform the framework for the economic regulation of airports. Today I am announcing that legislation to implement these reforms will be introduced early in the next session.

“Reforming the framework for airport economic regulation will help improve the quality of service that passengers receive at designated airports and contribute positively to economic growth.

“As I set out in my statement to the House on 21 July 2010, we plan to replace the existing statutory framework for regulation at designated airports with a more flexible licence based system. This will give the CAA the powers it needs to become a more responsive regulator, for example to deal with events such as the severe weather this winter. The reforms will also strip out unnecessary regulation and support passenger-focussed investment in existing airport infrastructure.

“I am keen to ensure that there is a smooth transition to the new regime and we will work with the CAA and industry to achieve this. In particular, the Government will not be making changes to the basis on which the current price caps at  Heathrow , Gatwick and Stansted are set.”

BAA press office
020 8745 7224