Britain's aviation regulator proposed removing caps on the prices airport operator BAA can charge airlines using London's Stansted airport today but recommended widening price controls at Heathrow and Gatwick airports.
The Civil Aviation Authority (CAA) also proposed cutting BAA's allowed cost of capital, or the rate of return it can earn on investments - but not as far as hoped by some airlines.
The CAA's proposals were made as part of a consultation on the prices BAA can charge airlines using London's three regulated airports from 2008 to 2013.
Price controls at Stansted airport, a hub for budget carrier Ryanair, will be removed under the proposals to reflect the need for substantial investment at the fast-growing airport, the CAA said.
"The CAA finds only a limited possibility that Stansted can be expected to enjoy a position of market power that justifies price regulation," the regulator said.
It proposed a cap of Retail Price Index (RPI) plus 4-8 per cent each year at Heathrow compared to the current rate of growth in price caps of RPI plus 6.5 per cent.
BAA is building a £4.2 billion third terminal at Heathrow and plans a second runway at Stansted under government-backed plans to cope with growing air-travel demand.
BAA is regulated because it effectively has a monopoly as the owner of London's three main airports. Spain's Ferrovial owns BAA.