BAA Pays £3.1 Million Rebates to Airlines
Airports operator BAA has paid £3.1 million in rebates to airlines for failing to meets its performance targets during April and May.
As part of its wider campaign to increase charges to airlines operating from Heathrow and Gatwick, industry regulator the Civil Aviation Authority (CAA) has the power to fine BAA if the airport operator doesn't meet performance targets.
In April and May, the airport did not meet these performance targets, so triggering the rebates.
BAA is exposed to paying rebates of up to 7% of airport charge revenues.
BAA Airport Performance Targets
The CAA set a certain number of stringent airport service targets for BAA. These include targets for the length of time passengers queue at security checkpoints and efficiency of security searches. Once the airport's performance drops below these targets, the rebate mechanism is triggered.
An example of a performance target for BAA is the fact that passengers should queue for less than five minutes for 95% of any operational day.
In April and May, the CAA said, the airport operator did not meet the targets on security queues. Additionally, penalties were imposed for a lack of equipment and inefficient searches in the newly-opened Heathrow Terminal 5.
Dr Harry Bush, the CAA's Director of Economic Regulation, commented: "That BAA has incurred penalities in the first two months of the financial year shows it has some way to go to deliver the required service quality".
BAA's Performance Failings
The rebates for BAA's performance failings are part of a wider package of measures intended to make improvements at Heathrow.
Another aspect of this are the higher landing charges which are being levied against airlines at Heathrow (and Gatwick). Charges per passenger have risen by 23.5% for the current financial year, and prices will rise by inflation plus 7.5% for the next four years.
The idea is to raise revenue which can be driven into service improvements at the airport. Airlines have angrily criticised the higher landing fees.
However the CAA is also keen to ensure BAA takes action itself to improve its performance, hence the rebate scheme being imposed.
Dr Bush added: "BAA needs to deliver its side of the regulatory settlement".
Source - Airport International's Aviation Correspondent
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