Ryanair, Europe's only ultra-low cost airline, welcomed today’s (20 Dec) publication by the CAA of its “minded to” assessment of Stansted’s market power. The CAA is minded to rule that Stansted has market power, and accordingly must be subject to effective regulation to protect the reasonable interests of Stansted’s users (airlines and passengers) from exploitation by the BAA Stansted monopoly.
In particular Ryanair welcomes the CAA’s finding that “Stansted is pricing to its regulatory price cap and there is evidence to suggest that it is pricing above the competitive level”. The CAA has commissioned an independent benchmarking study which shows that Stansted’s prices are likely to be above the level of comparator airports.
Ryanair believes that this finding vindicates the earlier ruling of the Competition Commission, that the CAA’s “inadequate” regulatory regime has adversely effected competition and users at Stansted. Over the past five years from 2007 to 2011, the BAA Stansted monopoly has doubled its prices, while traffic has declined by 25%. The BAA has repeatedly claimed that this traffic decline is due to “low consumer confidence” without explaining why Heathrow and Gatwick have returned to traffic growth. The ability to raise prices, even when other competitive airports are reducing them, is in Ryanair’s view compelling evidence of BAA Stansted abusing its market power.
Ryanair’s Stephen McNamara said:
“We welcome today’s finding by the CAA that Stansted has market power, and that evidence shows it is pricing “above the level of comparator airports”. This is why Stansted’s traffic has declined in recent years, even as Gatwick, Heathrow and other UK airports have returned to growth.
Ryanair welcomes the current forced sale of Stansted by the over-charging BAA monopoly, but it is clear that any new owner of Stansted will have to be subject to effective regulation, as opposed to the CAA’s previous inadequate regulator regime. Effective regulation is the only way to ensure that the interests of Stansted users are protected, and Stansted is returned to a low cost, high growth future in the best interest of the airport itself, its airline customers and most of all its passengers.
Ryanair welcomes today’s findings by the CAA and hopes that it will lead to a much more effective regulatory regime in future where the new owners of Stansted Airport are forced to run an efficient facility and price its services at or below the level of comparator airports.”