Gatwick spending £1billion to compete with rival airports
Gatwick Airport has committed £1 billion of investment to compete with rival South East airports.
The package includes transformed check-in areas, a revamped North Terminal security area and a replacement pier walkway.
It would be implemented between 2014 and 2019 and is on top of £1.2bn already being spent.
The work will come at a cost to passengers - but Gatwick argues a new deal on price regulation will reduce costs for travellers and airlines.
The airport wants to be released from price regulation by the Civil Aviation Authority (CAA) which it says will allow it to deliver cheaper fares.
Chief executive Stewart Wingate said: “Competition is by far the best mechanism for promoting the interests of passengers. Our proposed new deal for Gatwick offers a better deal for airlines and their passengers than a regulatory outcome.
“The deal means airlines and passengers win on price, service and the quality of facilities.”
The announcements are included in Gatwick’s revised business plan to 2024.
The airport is one of three including Heathrow and Stanstead bound by CAA price regulation.
By removing costs of regulation, improving incentives and speeding up investment, Gatwick says it can offer airlines lower prices over longer periods than within a regulatory framework.
According to the proposal, after a one-off price increase of 10.7 per cent, the average price would increase by a maximum 1.3 per cent above inflation over seven years.
This equates to an increase in the per passenger fee from £8.80 in 2014 to a maximum of £10.68 in 2020/21.
Under regulation the average price level would increase by a maximum 3.3 per cent on top of inflation, taking the per passenger fee up to £11.45 by 2018/19.
In contrast Heathrow has just announced per-passenger fee increases of six per cent above inflation.
The CAA will decide on the initial proposal on April 30 2013 and make a final decision in January 2014.
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Wednesday 19 June 2013
Temperature: 15 C to 27 C
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