London Gatwick responds in full to the CAA’s final proposal for the regulation of Gatwick airport after April 2014

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.