Regulation of airport charges at Stansted Airport
The UK Department for Transport is consulting on whether Stansted, London’s third largest airport, should continue to be “designated” under the terms of the Airports Act 1986. If Stansted is de-designated then the overall level of its airport charges will no longer be subject to a maximum limit set by the Civil Aviation Authority (CAA). This move has important implications for competition in the airport and airline sectors, the future level of airport charges and the incentives on airport operators to develop efficient levels of airport capacity.
The move to de-designation is strongly opposed by easyJet, one of Stansted's largest airline users.
easyJet commissioned Frontier (London) to examine rigorously the two-way relationship between prices and capacity in an unregulated airport market, and use statistical analysis of customer sales data to explore the relationship between passengers preference for air services offered at different airports and travel distance to each of the available choices.
The resulting paper is available from today from the publications section of this website.
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