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<p>The Government is clear that expansion cannot come at any cost, and must be in
the interest of the consumer.</p><p> </p><p>Fares are set by airlines after taking
a wide range of factors into account, but it is the Government’s expectation that
increased airline competition following expansion would help increase choice and reduce
fares for passengers.</p><p> </p><p>Heathrow Airport Limited has committed to delivering
expansion while keeping airport charges at close to 2016 levels in real terms. In
its most recent assessment of affordability, the CAA stated that there are plausible
scenarios in which this can be delivered. Government and the CAA will continue to
hold industry to account to deliver expansion that is in the best interest of the
consumer. The CAA has confirmed that this could include a small increase in airport
charges if this were required to unlock the wider consumer benefits of expansion.</p><p>
</p><p>In its Final Report, the Airports Commission also noted that the analysis it
had commissioned suggested that expansion of either Heathrow or Gatwick would deliver
competition benefits and that fares would be likely to remain unaffected or even to
fall, even after an increase in airport charges. Competition benefits could be even
greater for expansion at Heathrow, given the significant pent up demand at that airport.</p><p>
</p><p>The Department has not conducted an assessment of Gatwick Airport Limited’s
latest plans, on the basis that it will be for Gatwick Airport to prepare an economic
case for any proposal, which the Planning Inspectorate would examine through the development
consent process.</p>
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