The August airport security crisis could lead to new charges for airlines using Heathrow, as the aviation watchdog considers the funding of London's major flight hubs.
The Civil Aviation Authority is considering allowing BAA, the owner of Heathrow, Gatwick and Stansted, greater "flexibility" in the charges that it levies on airlines for using its facilities. The CAA has asked Britain's largest airport operator for an analysis of events following the terror scare on August 10, including an assessment of its contingency planning for sudden increases in security demands.
A spokesman for the CAA said the watchdog wanted to discuss the concept with the aviation industry in the run-up to the publication of a consultation on BAA's charges before Christmas: "We would like the airlines and the airports to engage on this and discuss it." A spokesman for BAA declined to comment.
BAA earned £893m - or 40% of its revenues - from the charges paid by airlines last year. Any increase in the fees that BAA charges for using Heathrow is capped at the rate of inflation plus 6.5% by the CAA. Charges for Gatwick and Stansted are capped at inflation. The fees BAA levies for its London-based airports are regulated by the CAA, which is in the process of setting the tariff for 2008 to 2013.
The price cap regime already contains clauses to cover increased security costs: if they rise above £30m because of exceptional circumstances, BAA can bill airlines for three-quarters of the budget overspill. One solution could see the limit reduced to £20m, thus increasing airlines' exposure to security costs. Alternatively, the price cap could be relaxed to allow BAA to charge more in exceptional circumstances in order to hire extra staff.
BA and Ryanair have attacked BAA for its handling of the security crisis, which some aviation industry insiders say has been influenced by the jockeying for position over Heathrow fees and an Office of Fair Trading investigation into BAA's dominance of the British airport industry. However, in some industry quarters it is felt that BAA faced an impossible task in the days after August 10, when the workload on its staff increased by 400%.
Heathrow was crippled by the terror alert. Some restrictions were relaxed days later but the chaos cost airlines tens of millions of pounds: British Airways cancelled 1,280 flights at an estimated cost of £40m.
A spokesman for BA, which paid BAA £360m in fees last year, said the airline wanted its Heathrow landlord to be more efficient. BA has called for a supervisory committee, including airline representatives, to oversee BAA's investments.
