CAA wants more competition at UK airports

[September 26th 2008]

Airport scene

The airport regulator the CAA has responded to the Competition Commission’s report on the break up of airport operator BAA and says more competition at airports will bring benefits for passengers.

“The CAA supports the CC’s provisional finding that BAA should sell two South East airports and one in Scotland,” says Civil Aviation Authority group director, economic regulation group, Dr Harry Bush.

But the CAA feels there is an even stronger case for breaking up BAA’s monopoly in the south east than the CC suggests. “The CC currently focuses on the potential gains from competition over the longer-term. This is only half of the story. Competition in the short-term – even between airports with busy runways – can be expected to deliver significant benefits to passengers and airlines,” says Bush.

The CAA believes that even without more runway capacity independent airports can compete by offering better service, better prices and more innovative ways to use their assets. For this reason, it suggests the CC should reject BAA’s argument that airports cannot compete when their runways are full.

In its report the CC proposed that the CAA should have a statutory duty to protect the interests of airlines, as well as passengers. The CAA says it recognises that the interests of airlines and passengers will be the same most of the time.

“But this will not always be the case. The CAA believes that it is important, therefore, to have a clear focus for regulation of airports, and that should be on passengers,” the aviation regulator says in a press statement.

The CAA argues strongly that airport regulation needs to be reformed. “The CAA has called for a clear framework that provides sufficient flexibility to allow the regulation of airports to adapt to changing market circumstances – not least the emergence of increased competition – and to act more rapidly when unfair conduct is identified,” the press statement continues.

Not surprisingly, the CAA also welcomes BAA’s decision to sell Gatwick airport. “It is an important first step towards the development of more effective competition in the UK airports market. It is, however, only the first step,” stresses Bush.

Written by: Nick Purdom


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CAA Wants More Competition At UK Airports