Call for Regulators Dismissal
Ryanair Holdings PLC
29 April 2008
'INADEQUATE' REGULATOR PROPOSES UP TO 150% PRICE INCREASE IN STANSTED
RYANAIR CALLS FOR REGULATOR TO BE DISMISSED AND REPLACED WITH COMPETING LONDON
AIRPORTS
Ryanair, the UK's largest passenger airline, today (Tuesday, 29th April 2008)
renewed its call for the dismissal of the CAA's Harry Bush, the regulator who
has this morning announced proposals for increases to passenger charges at
Stansted of between £4.00 and £7.00, or up to 150%. This follows a doubling of
these charges just last year. This more than doubling of already high passenger
charges demonstrates just how ineffective regulation is and Ryanair is calling
for the immediate breakup of the BAA airport monopoly in order to replace this
'inadequate' regulation with competition.
Ryanair has highlighted the lamentable recent record of the CAA in regulating
the Stansted Airport monopoly:
1. •Stansted's traffic is way ahead of their forecasts and their capital
expenditure is significantly behind forecast, yet passenger charges at
Stansted have risen, not fallen.
2. •CAA stood idly by in April 2007 when BAA Stansted doubled passenger charges.
3. •Despite the so called regulatory cap which limits BAA Stansted's income at
7% of capex this year, thanks to better than expected passenger numbers, and
the doubling of prices last April, BAA Stansted will recover approx. 14% of
its capital or double that allowable under the cap.
4. •Instead of depreciating Stansted's assets each year, like most other
companies do, CAA allows BAA to increase the value of these assets by
inflation, thus double charging passengers.
5. •CAA failed to intervene over the past two years at Stansted when thousands
of passengers were stuck in ridiculously long security and boarder control
queues.
The UK Competition Commission's recent interim review on its investigation into
BAA's market power found that:
a) The BAA's monopoly ownership of Edinburgh and Glasgow airports
has adversely affected competition;
b) The BAA's monopoly ownership of Heathrow, Gatwick and Stansted
airports has adversely affected competition;
c) The way the BAA monopoly has conducted its business has adversely
affected competition; and
d) The inadequate regulatory regime operated by the CAA has adversely
affected competition.
This regulator has clearly demonstrated that he has no interest in actually
protecting the reasonable interests of users but instead persists in his
'inadequate' and 'light handed' approach to the BAA monopoly. Ryanair has
already announced that it will join easyJet's legal challenge of an equally limp
wristed approach by the regulator in Gatwick and will likely have to challenge
any decision by the CAA in Stansted.
Speaking today, Ryanair's Head of Legal & Regulatory Affairs, Jim Callaghan
said:
'Harry Bush has patently failed Stansted users and consumers in recent years.
The CAA's record includes:
a) Doubling of passenger charges in 2007;
b) Ignoring long security queues at Stansted;
c) Doing nothing about even longer border control queues;
d) Ignoring the unanimous opposition of users to BAA's plans to spend £4bln. on
Stansted G2 when £1bln. would suffice; and
e) This morning's recommendations to allow the BAA monopoly to further increase
passenger charges by up to 150% means that passengers continue to suffer
from Mr. Bush's incompetence.
The CAA has ignored volumes of evidence from Stansted airlines, the findings of
the OFT, DfT and now the CC, all pointing to the conclusion that BAA Stansted is
an abusive monopoly. Ryanair has long called for the break-up of the BAA
monopoly in London and for the three main airports to compete against each
other.
This latest failure by the regulator only makes this solution even more urgent.
Ryanair therefore renews its call for this failed regulator to be dismissed and
for the Competition Commission to recommend the immediate break-up of the BAA
monopoly so that the 3 London airports can be spun out into separate ownership
and competition can finally be introduced into the London airports market.
The BAA monopoly isn't working, CAA regulation is 'inadequate' and it is time to
let competition deliver better services and lower prices for British passengers
and visitors.'
Ends Tuesday, 29th April 2008
For further information:
Peter Sherrard - Ryanair Pauline McAlester - Murray Consultants
Tel: 00 353 1 812 1598 Tel: 00 353 1 4980 300
This information is provided by RNS
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