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5 November 2013
London Gatwick has today submitted its response to the Civil Aviation Authority’s (CAA) final proposals for the economic regulation of the airport beyond 2014.
In October of this year, the CAA recommended that Gatwick’s proposed Commitments framework should be the preferred outcome over traditional forms of regulation and would deliver the opportunity of an improved future outcome for passengers in terms of service quality, facilities and price. We welcome the CAAs acceptance of our Commitments framework. With the inclusion of win-win contract discounts for airlines, the average price under the Commitments framework is limited to only RPI + 0.5% over seven years. This price path would enable us to continue to invest and improve the airport experience for passengers.Stewart Wingate, London Gatwick Airport CEO said: “The CAA’s endorsement of our Commitments framework will lead to a transformational change in the way we operate and how we co-operate commercially with our airline partners. More importantly, it will change the way we collectively work together to transform the passenger experience and deliver even higher levels of service and choice than we do today, and ensure that prices remain competitive and travel remains affordable. “We will continue working with our airline partners to put in place long-term commercial contracts and look forward to the CAA confirming its support for this Commitments framework in its final decision in early 2014”. In our response to the CAA’s final proposals, we confirmed that we have made some additional minor changes to the Commitments framework, following further input from our airline customers. In addition, we have asked the CAA to provide clarity and guidance in relation to the financing of new runway developments should the Airports Commission recommend that the next new runway should be at Gatwick.Finally, in early 2014 the CAA will make final decisions on the level of Market Power at Gatwick and whether Gatwick requires a licence. We believe the evidence proves that, with just a 25% share of the London market, Gatwick does not have Substantial Market Power and therefore does not need a licence. However, Gatwick confirms that if the CAA eventually finds that it does have Substantial Market Power, it will still deliver on its Commitments which will be included in the Airport’s Conditions of Use as legally enforceable contractual obligations.For the full submission, please click here.
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About London Gatwick
Gatwick Airport is the UK’s second largest airport and the most efficient single-runway airport in the world. It serves more than 200 destinations in 90 countries for around 38 million passengers a year on short and long-haul point-to-point services. It is also a major economic driver for the South-East region, generating around 21,000 on-airport jobs and a further 10,000 jobs through related activities. The airport is 28 miles south of London with excellent public transport links, including the Gatwick Express. Gatwick Airport is owned by a group of international investment funds, of which Global Infrastructure Partners is the largest shareholder.
In its December 2013 interim report, the Airports Commission included London Gatwick and Heathrow on its shortlist of potential locations for a new runway in the UK. Expansion at Gatwick will best meet the UK’s aviation needs for the future, can provide the greatest economic boost with the least environmental impact, and a new runway can be operational by 2025. For further information, see: www.gatwickobviously.com
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