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News - 4 January 2006
Gatwick won’t pay for Stansted
The airline industry regulator has ruled out any cross subsidy by British Airports Authority (BAA) for the proposed expansion of Stansted airport. This means that Gatwick and Heathrow will not be footing the bill for nearly £3bn of improvements (see earlier stories in Knowledgebase), which would increase Stansted’s capacity by 43% to 50 million passengers
The Civil Aviation Authority has indicated that the south-east’s three airports will continue to be regulated on a stand-alone basis for the period 2008 to 2013 which has come as a relief to business leaders.
BAA initially said that without cross subsidy a second runway at Stansted would not be viable until some time after the government’s target date of 2012. It then suggested that a special charge dubbed a “public interest levy” could be raised against airlines at Gatwick and Heathrow which was strongly opposed by carriers such as British Airways which is already subsidising the construction of the fifth terminal at Heathrow.
The CAA ruled against cross subsidy because it did not consider it to be in the interests of airline passengers overall and could even place Gatwick and Heathrow at an unfair disadvantage.
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British Airports Authority
Civil Aviation Authority