The Civil Aviation Authority (CAA) has told BAA that they must halve queueing times at Heathrow and Gatwick or face annual fines of up to £75 million. In a move that would increase the financial pressure on Britain's largest airport operator, the new regime will add hundreds of millions to BAA's security bill. The CAA plans to punish the group if security queues are more than five minutes for 95% of the time, with a maximum queueing time of 10 minutes at Heathrow and 15 minutes at Gatwick. Harry Bush, the CAA's director of economic regulation, said the airports' performance this year would have triggered heavy fines under the new regime, due to come into force next April.
BAA has been fined £2 million this year for missing performance targets, including the current guideline that passengers should queue for no longer than 10 minutes in security areas. But it is not all bad news as the CAA is also offering a bonus of up to £32 million to BAA if it outperforms. Bush admitted that the airport owner would struggle to bring down queueing times sufficiently and said "these are quite difficult targets."
The CAA also outlined plans that could reduce BAA's annual cashflows by £150 million between 2008 and 2013. The regulator, which sets landing charges and the return on investment at BAA's largest airports, said it planned to cut the return on capital at Heathrow from 7.75% to 6.2% and at Gatwick from 7.75% to 6.5%. BAA said that would endanger projects such as the £3.5 billion redevelopment of Heathrow's central terminals and did not accommodate the cost of a tougher security regime.
Airlines criticised CAA proposals to increase landing charges at Heathrow by 15.6% to £11.97 a passenger, with annual price rises capped at 7.5% above inflation. British Airways, BAA's largest customer, said service standards could be improved without an "excessive" rise in landing charges. BAA has warned the regulator that the landing charges would not be high enough to compensate for the reduced return on capital. (source: The Guardian)
It appears as if there are fresh interest in Northern Rock as the ailing bank said it has received further "indicative expressions of interest" from firms which might be considering a buyout or investment. Northern Rock said that one interested party may make an offer for the bank below its closing share price of 97p on Tuesday.
On Tuesday, US buyout firm JC Flowers submitted a bid that included an offer to shareholders of a "nominal value". And a second bid emerged on Tuesday from American private equity firm Cerberus. Shares in Northern Rock were down 15% at 82.60p in early London trade today.
The Bank of England has lent the bank an estimated £24 billion in emergency funding, a move defended by Chancellor Alistair Darling in the Commons on Monday. Northern Rock, which has about 6 000 staff, is keen to secure the bank's future as soon as it can. In a statement it said: "The company's advisors have begun discussions with a number of selected interested parties to clarify their proposals. The bank said: "These guarantee arrangements will protect all retail deposits held with Northern Rock regardless of the amount deposited and apply to all existing, re-opened and new retail accounts". (source BBC News)
In the battle for Apple’s iPhone, Vodafone has claimed a partial victory in a legal challenge to block a German rival from selling Apple’s iPhone exclusively. The German unit of the British mobile giant secured a temporary injunction yesterday against T-Mobile Deutschland after claiming that its deal with Apple breached local competition laws.
Vodafone said that the German operator should be forced to make the phone available over other networks, including its own. Success by Vodafone could force Apple to rethink its controversial business model for the phone.
T-Mobile will release a statement today detailing its full response to the injunction, which was granted by a court in Hamburg. It intended to appeal against the decision and threatened to sue Vodafone for damages.
The iPhone, which has amassed more than one million sales in the United States, went on sale in Germany this month. Buyers must sign a two-year contract with T-Mobile and the phone cannot be used on other mobile networks.
T-Mobile said yesterday: “We have spent months thoroughly testing the iPhone to ensure it works properly on our network. Given the approach adopted by the competitor Vodafone, which lost out to T-Mobile in the contest to distribute the Apple iPhone in Germany, T-Mobile reserves the right to examine the option of suing for maximum damages.”
Despite a fierce battle in the UK, Vodafone lost out to O2 , and in France, to Orange. However, Apple’s approach has already been tested in France, where local laws have forced Orange to open up the phone to other networks.
German analysts said that they expected the operator to comply with Vodafone’s demands and stock “unlocked” iPhones, which work over other networks. However, the injunction does not force T-Mobile to take any immediate action. A full hearing is scheduled for two weeks’ time. (source: Timesonline)