Airlines are having a rocky ride

The Civil Aviation Authority (CAA) announced on Friday it would allow landing charges to be increased at Heathrow airport in west London.

We will fight this proposal tooth and nail Sir Richard Branson

The increase will result in airlines facing a 36% increase in charges over the next five years, but the CAA said its decision would not "materially affect air fares."

The news, however, was seen as another blow by the cash-strapped aviation industry, and Virgin Atlantic said it had "no choice but to pass these increases on in fares."

'Sheer madness'

Virgin chairman Sir Richard Branson said: "This is sheer madness.

"At a time when fuel prices are at $40 a barrel and when BAA is still making massive profits, whoever suggested that it be allowed to raise charges to airlines by 40% must be off their heads.

"It begs the question - who regulates the regulators? We will fight this proposal tooth and nail or we'd have no choice but to pass these increases on in fares."

British Airways echoed Sir Richard's comments.

"These increases are bad news for the travelling public and bad news for an industry already in financial distress," said a spokesman.

Charge effect

The effect of the changes will mean that take off and landing charges - which include parking - will rise from �6.13 to �6.48 in 2003 to 2004.

It will then increase on average by 43p each year over the next five years.

"These price cap increases are necessary to enable BAA to deliver services to a growing market through a major investment programme, its �7.4bn 10-year plan to boost long-term capacity at its London airports, which includes the fifth terminal at Heathrow," the CAA said in a statement.

Stansted and Gatwick airports are also affected by the increases.

The maximum allowed charge at Gatwick would be �4.32 per passenger in 2003/04 and then rise by RPI in each year thereafter, while Stansted would be �4.89 in 2003/04 and then increase by RPI over the remaining four years.