Press Release No.:
Date: 3 June 2003
BAA Fee Increase Outrageous In Light of Profit Announcement
(Washington) – Leaders of the world's airlines, gathered in Washington for the International Air Transport Association (IATA) World Air Transport Summit, expressed dismay at the lack of effective economic regulation of UK airports. BAA Plc announced a pre-tax profit of to £524 million for the fiscal year ended 31 March 2003 amid the worst crisis in the aviation industry.
Earlier this year the BAA announced plans for a 6.5% plus RPI annual increase over the next five years in Heathrow Airport landing charges. This increase was approved by the UK Civil Aviation Authority.
"The lack of effective regulation of a private monopoly as important as BAA is outrageous," said Giovanni Bisignani, IATA's Director General and CEO. "We are asking for reason to be the rule. BAA is extremely profitable at current fee levels even as the entire industry is reeling from a disastrous and unprecedented combination of crises. There is no justification for a 6.5% increase in charges above the inflation rate when the focus of the entire industry is on cost reduction," said Bisignani.
Annually airlines pay over US$40 billion to airports and air traffic service providers. So severe is the situation that Federico Bloch, CEO of TACA Airlines (Central America) and a member of the IATA Board of Governors asked the World Air Transport Summit to consider an alternative charging scheme. The scheme would have all airport charges paid directly by passengers to make airports accountable for their costs to travellers, the ultimate consumer of their services.
The IATA Annual General Meeting, taking place concurrently in Washington, yesterday adopted the Washington Declaration as its roadmap for recovery. The Declaration called on Governments around the world, including the UK Government, to implement effective economic regulation of airport and air traffic service entities which often operate under monopolistic conditions.
IATA represents over 270 airlines comprising 98% of international scheduled air traffic.