Low fares safeguarded by CAA

The UK airline industry regulator has moved to protect the interests of passengers by saying BAA price controls will not be affected by costs incurred by an ongoing takeover battle.

Rising fuel prices and other factors have led to worries that low-cost airlines will have to pass on costs by bumping up fare prices.

However, the Civil Aviation Authority (CAA) has said it will not allow airport operator BAA to cover costs from a possible takeover by Spanish group Ferrovial by increasing airport charges.

"In this way, the CAA aims to protect airlines' and passengers' interests in reasonable prices, good quality and timely investment," Harry Bush, the CAA's chief of economic regulation, told Forbes.

The CAA will determine price controls for airport operator BAA, which operates UK airports including Heathrow and Gatwick, and any costs related to a possible takeover would be for present or future BAA owners to bear themselves.

And the CAA also moved to improve things for travellers by confirming that it would regulate BAA's airports separately.

The regulator believes this is "the best means of encouraging each airport to meet airlines' and passengers' demands for service quality and capacity in an efficient manner".

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