Easyjet To Go To Court Over Price Increases

Low cost airline Easyjet is to go to court over the price hike seen at Heathrow and Gatwick Airports meaning that there is a possibility of a judicial review of the decision made by the CAA permitting the rise in charges.

Easyjet have informed BAA and CAA of their intentions and they are hoping for a favourable outcome by the end of this year that will see the prices reduced. This could, if the case Easyjet puts forward is accepted, threaten the re-financing of the two BAA airports and place the Spanish owners, Ferrovial in serious financial difficulties as they have struggled to re-pay their loans since purchasing BAA in 2006.

Easyjet have taken this action after conflict with the BAA and CAA and many high-profile airlines occured with the airlines accusing the CAA of bowing to pressure from BAA and allowing them to push through large price hikes.

It was in early March that the CAA announced that it would permit Heathrow Airport to increase its charges to 23.5% from the 1st of April. The CAA defended itself by saying that the development at the BAA airports had to be paid for. However with legal action looming it appears that this will be the first case of the CAA being challenged since they starting regulating airports.

The CAA have announced that they have no record of being notified by Easyjet of their intentions but would “vigorously defend” itself. Easyjet have stated “We do not believe the CAA has acted correctly in its review of BAA’s pricing. It has not followed the necessary process and has shown a systematic bias in favour of BAA.”

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Published by: Jon Vickery