29th Apr 2008 12:26
Ryanair Holdings PLC29 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 whohas this morning announced proposals for increases to passenger charges atStansted of between £4.00 and £7.00, or up to 150%. This follows a doubling ofthese charges just last year. This more than doubling of already high passengercharges demonstrates just how ineffective regulation is and Ryanair is callingfor 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 regulatingthe 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 intoBAA'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 actuallyprotecting the reasonable interests of users but instead persists in his"inadequate" and "light handed" approach to the BAA monopoly. Ryanair hasalready announced that it will join easyJet's legal challenge of an equally limpwristed approach by the regulator in Gatwick and will likely have to challengeany decision by the CAA in Stansted. Speaking today, Ryanair's Head of Legal & Regulatory Affairs, Jim Callaghansaid: "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 ofthe OFT, DfT and now the CC, all pointing to the conclusion that BAA Stansted isan abusive monopoly. Ryanair has long called for the break-up of the BAAmonopoly in London and for the three main airports to compete against eachother. 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 andfor the Competition Commission to recommend the immediate break-up of the BAAmonopoly so that the 3 London airports can be spun out into separate ownershipand competition can finally be introduced into the London airports market. The BAA monopoly isn't working, CAA regulation is "inadequate" and it is time tolet competition deliver better services and lower prices for British passengersand 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 The company news service from the London Stock ExchangeRelated Shares:
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