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Air passengers face fare hikes of up to £20 but BAA boss picks up £2.6m for presiding over baggage chaos
Last updated at 01:37am on 13.03.08
BAA claims landing fees will contribute towards improving airport services, such as shorter queuing times
The news came as it was revealed that the boss who presided over airport queue and baggage chaos was paid £2.6million last year.
The fare rises are to fund the debt-ridden Spanish owners of BAA which runs the two biggest airports, Heathrow and Gatwick.
BAA is struggling under the weight of £9billion of debt taken on by its parent company Ferrovial to fund its £10billion purchase of BAA 18 months ago.
Angry airline bosses say the rises have been sanctioned by the Government's "weak" aviation watchdog only to save ministers the embarrassment of bailing out "another Northern Rock-style collapse".
But the timing could not have been worse as they coincided with publication of BAA's 2007 accounts showing that the airport operator paid its recently ousted chief executive Stephen Nelson £2.6million, including an unexplained one-off bonus of £1.5million.
Mr Nelson, who presided over 18 months of airport chaos, baggage crises and queues dubbed "Heathrow Hell", was effectively sacked last month amid criticism that BAA was more concerned with shops than passenger services.
Yesterday, the Government's Civil Aviation Authority (CAA) sanctioned increases of up to 90 per cent in the landing charges that BAA can impose on airlines over the next five years.
In a deal branded "a national disgrace", passengers face paying up to £20 extra per flight at Heathrow and up to £10 at Gatwick.
Tour operators are bracing themselves for a rush of summer break bookings before any extra charges are passed on to them from April 1 when the new landing fees take effect.
The controversy comes just days before the official opening on Friday of Heathrow's new Terminal 5.
Airlines who had argued for lower charges said weak Government CAA regulators had given BAA "a licence to print money".
They urged Transport Secretary Ruth Kelly to break up BAA to end its monopoly and shake up the anti-competitive system of airport regulation which was "no longer fit for purpose".
BAA's ownership of seven major UK airports is the subject of a Competition Commission inquiry.
British Airways, Virgin Atlantic, bmi, easyJet and Ryanair said passengers were being forced to "pay the price of failure" of BAA and Ferrovial.
Steve Ridgway, chief executive of Virgin Atlantic, said: "In the light of the reform of banking regulations needed after the Northern Rock crisis, it is time for the Transport Secretary to now step in and urgently reform the regulatory system before we see a "Southern Rock" crisis caused by BAA's shaky finances."
British Airways said the CAA's actions "proved conclusively that the airport regulation system has failed".
The airline said BAA had wasted £124million already in "preliminary spend" on the development of a second runway at Stansted Airport in Essex.
The CAA insisted its ruling would provide for "shorter security queuing times", enhanced levels of service, more reliable equipment and cleaner terminals, and better information to passengers.
But BAA complained that the settlement still did not give it enough.
It said it was planning to spend £4.8billion in the next five years on upgrading airports.
In October, Competition Commission watchdogs ruled that BAA had 'acted against the public interest' in failing to manage chronic queueing at Heathrow and Gatwick.
BAA yesterday officially unveiled its controversial plans to build a second runway and double the size of Stansted.
The £2.5billion scheme was described by protesters as "tantamount to a declaration of war".
A public inquiry is likely to begin by the end of this year and take a year to complete.
Reader views (6)
Here's a sample of the latest views published. You can click view all to read all views that readers have sent in.
Every point made by the airlines is correct, but do not forget that the real villain is Government whose chaotic and disastrous response to the "War on Terror" has led to sudden impositions of expensive and unnecessary rules and regulations. Many delays and aggravations which travellers have experienced have been placed at the feet of BAA but it is simply not possible for any company to cope with sudden additions of rules about carrying one lighter and not 2, changing baggage allowances and making bizarre rules about sizes and bottles of liquid. Like the rules on mobile phone use on flights, these rules are phony and have an agenda. The baggage rules were designed to pretend to the public that "something is being done" about terrorism. Government has purposely caused jams and aggravations in what amounts to a fraud and used its muscle to put blame on the private companies. Yes, the system is anti-competitive and the monopoly should be broken up - my group on the Assembly was the very first to call for this - but if government is allowed to carry on in its present way, all you will get is a handful of companies in this mess and having to look for more money, with long queues and angry passengers. Instead of just one convenient scapegoat.
- Damian Hockney Am, Mayoral candidate for One London Party, City Hall, London SE1
It's pretty obvious that BAA are in trouble. The millions upon millions of passengers that pass through Heathrow, Gatwick and Stanstead, which are a captive audience, once through passport control and must buy drinks perfumes food etc etc are a gold mine on legs. If they cant maintain a few runways and make a profit, then International travel is finished and the age of cheap travel has gone.
- Colin Bond, London
Again its the consumer that pays and not those to blame. No wonder this country is slipping in the world league! utterly ridiculous.
- Josh, london
24°c
