Passengers flying out of Stansted Airport could benefit from cheaper deals after the Civil Aviation Authority announced it is to end economic regulation of the Essex terminal.

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The authority says Stansted does not have “substantial market power” and that it should be free to compete with other airports on how much it charges airlines to use its facilities.

The CAA regulates airports when airlines or passengers have limited or no choice to go elsewhere, for instance because of capacity constraints, It says its decision has taken into the account the long-term contracts the airport recently signed with its main airline customers, easyJet and Ryanair, who have committed to five and ten-year deals respectively with Stansted’s owners, the Manchester Airports Group (MAG).

However, the CAA announced it will continue to regulate prices at Heathrow and Gatwick.

CAA’s announcement applies to passenger travel at Stansted. A decision on the air cargo market at the airport is expected in March.

A spokesman for MAG said the move should reduce the regulatory burden on the airport and airlines - bringing down costs, which could be passed onto passengers

Chairman of the CAA, Dame Deirdre Hutton, said: “We have focused on putting the passengers’ interest at the heart of our decisions and today’s announcement means passengers can look forward to lower prices and high service quality from London’s busiest airports.”

MAG’s chief executive, Charlie Cornish, added: “Since MAG acquired Stansted in February last year we’ve focused on building strong commercial relationships with airlines and delivering a better experience for passengers.

“After just 10 months, our approach to running Stansted is already yielding big benefits for passengers and airlines. The long term growth deals we’ve agreed with airlines – including Ryanair, easyJet and Thomas Cook – will see Stansted continue to grow rapidly over the next decade, offering passengers more choice in terms of destinations and frequencies.

“The CAA’s decision today to step back from regulating Stansted is a welcome endorsement of the changes we’ve made, and a positive recognition by the CAA that in Stansted’s case competition rather than regulation will deliver the best outcomes for passengers and airlines.

“Stansted is flourishing in a competitive environment, as we build long-lasting commercial partnerships with airlines and deliver excellent service to our customers.”

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