IATA: economic regulation of airports. The International Air Transport Association (IATA) blasted as a failure the UK’s Civil Aviation Authority’s decision to allow costs at London airports to rise by a massive 50% between 2008 and 2013.

“Failure is the only word to describe the CAA’s decision,” said Giovanni Bisignani, IATA’s Director General and CEO.

For Heathrow the CAA has allowed charges per passenger to rise by 23.5% from 1 April 2008, followed by increases of 7.5% plus inflation for each of the following four years.

In the case of Gatwick, a similar 21% hike from 1 April 2008 will be followed by increases of 2% plus inflation for each of the following four years. In 2006 BAA generated an operating profit of 35% at Heathrow, which produced a net return on capital invested of 15.3% - twice the level of the cost of capital set by the regulator.

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