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Stansted: CAA to end price cap controls on airport’s cargo operations

10:33 25 March 2014

The cargo facilities at Stansted Airport (foreground) and  the main passenger terminal (top, centre).

The cargo facilities at Stansted Airport (foreground) and the main passenger terminal (top, centre).

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Price cap controls on air cargo services at Stansted Airport are to end from April 1, the Civil Aviation Authority (CAA) has announced.

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Following a two-year review, the CAA has concluded that Stansted does not have substantial market power in its cargo operations and that it should be free from regulation to compete with other airports for cargo services.

The move follows an announcement by the CAA in January that Stansted’s passenger business will also be deregulated from April 1.

Iain Osborne, director for regulatory policy at the CAA, said: “The CAA’s role in cargo is to look after the interests of the consumers who own air-freight, and they appear to have a lot of choice in the market.

“We only economically regulate airports where there is insufficient competition, and our assessment has not found evidence that this is the case regarding Stansted’s cargo services. This follows our earlier decision that Stansted’s passenger services do not have market power.

“Together, these decisions mean Stansted will not be economically regulated from April onwards. This gives Stansted an excellent opportunity to innovate and we expect to see competition drive the delivery of high quality services that meet the needs of both passengers and cargo owners.”

Graeme Ferguson, commercial director for cargo at Manchester Airports Group (MAG), which acquired Stansted Airport a year ago from the former BAA group, said: “The CAA’s decision to take Stansted’s cargo operations out of economic regulation is a clear endorsement of the changes MAG has made at Stansted under new ownership over the past 12 months.

“The move is a positive recognition by the CAA that in Stansted’s case, competition rather than regulation will deliver the best outcomes for customers.

“We believe there is a significant opportunity to grow the cargo business at Stansted by adopting a different commercial approach, and we are committing considerable time and effort engaging with cargo operators.

“With spare capacity to support significant growth and additional economic activity, MAG sees this announcement as a key development in its strategy for developing Stansted Airport into a thriving cargo airport and continuing the airport’s return to growth.”

Stansted’s cargo operation involves more than 210,000 tonnes of goods and 30,000 tonnes of mail a year to destinations across the Americas, the Far East, Africa and the Middle East.

Cargo operators from the airport include Asiana, FedEx, Martinair, Royal Mail, Panalpina, Silkway, Atlantic Airways, Titan, TNT and UPS. Earlier this month, Qatar Airways announced it will join Stansted’s cargo network when it begins a new service from Doha in May.

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