Ryanair detail Stansted charges claim
28.07.11
Ryanair is claiming £175m in overcharges from BAA in a row over airline fees at Stansted airport, the Telegraph reports. Michael O'Leary, the airline's chief executive, chose the day of the airport operator's half-year results to say he had instructed lawyers Nabarro to detail Ryanair's complaint to both the Civil Aviation Authority (CAA) and the Competition Commission. ‘If that's not successful, we're off to the High Court,’ he said.
Mr O'Leary claimed BAA had been ‘overcharging’ airlines at Stansted by £50m a year for five years, with Ryanair paying £35m a year too much. He alleged five years of regulatory accounts for Stansted showed BAA had been ‘gaming the regulatory system’, effectively inflating the airport's regulated asset base (RAB). It is on the RAB, now worth £1.35bn, that the CAA allows BAA to make an annual return of about six percent.
The complaint was given short shrift by BAA, which last week was ordered by the Commission to sell Stansted and Glasgow or Edinburgh airports. Colin Matthews, BAA chief executive, told the newspaper: ‘It is not a coincidence that he is raising this issue now. He has a direct interest in depressing the value of Stansted.’
Mr O'Leary claimed Stansted's RAB would be ‘less than £800m’ if BAA had not shifted costs to it from Heathrow. These, he claimed, included £70m of unexplained ‘intra-group costs’ over four years, a ‘revised allocation’ of electricity charges between Heathrow and Stansted and a trebling of ‘other costs’. These are only explained as ‘a combination of supply chain initiatives and cost bundling, less marketing spend and reduced insurance premiums’.
Only these, he said, could explain the 16 percent rise in Stansted's costs to £180m between 2007 and 2011 despite a 24 percent drop in passengers to 18.3m. He said: ‘How the hell do costs go up when passenger go down?'
BAA could not immediately explain such cost rises, but Mr Matthews maintained all charges had been ‘scrutinised by the Competition Commission’ and complied with the CAA's price cap. He dismissed ‘any case for legal action’. The CAA and the Commission said they could not reset charges midway through a five-year regulatory period.
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