Customers are being warned of an air fare hike after Stansted Airport was allowed to raise the price it charges airlines.

The Civil Aviation Authority (CAA) announced last week that Stansted would no longer be regulated from April onwards.

Ryanair, which signed a new ten-year expansion agreement with the airport in September, believes the decision will “harm consumers”.

At present, Stansted, Heathrow and Gatwick are the only three regulated airports, which means the amount they can charge airlines for using them is capped.

But the CAA is deregulating Stansted because it believes the airport “does not have substantial market power”.

Stansted Airport is the largest single employer in Braintree district, with more than 1,500 residents employed at the site.

Juliusz Komorek, Ryanair director of legal and regulatory affairs, said: "Stansted will be able to further increase airport charges whenever it wishes, without any reference to competitive price levels.”

But the move has been welcomed by Stansted’s owners, the Manchester Airports Group (MAG).

Chief executive Charlie Cornish said: “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.

“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.

“The CAA's decision to step back from regulating Stansted is a welcome endorsement of the changes we’ve made.”