UK Civil Aviation Authority officials have asked anti-trust regulators to consider whether airports still require detailed economic regulation, or whether competition could provide the necessary consumer protection.
In a submission to the Competition Commission the CAA admits that the suggestion is a “seemingly radical option” but says it is a “logical consequence” of reforms which have aligned the airports market more closely with other economic sectors.
The CAA has put forward its ideas in response to the Competition Commission’s inquiry over the future of airports operator BAA.
It states that the regulatory regime for airports has remained largely unchanged for 20 years. The CAA says the regime should be modified to prioritise the interests of passengers and that the regulator should be granted more flexibility to adapt its regulation to the market.
The authority also says that further measures should be brought in to provide a check against unnecessary additional regulation. These could include a channel to the Commission through which airport operators, and others, could appeal regulatory changes.
But it adds that the Commission might consider whether there is even a case for retaining a detailed regulatory framework.
“Airports can, and do, compete for airlines’ business,” says the CAA. “The UK airport market is not characterised by natural monopoly. Rather, the degree of competition varies between airports, meaning that they do not necessarily need to be regulated.”
It adds that while airports have characteristics that affect competitive constraints, these do not automatically imply that economic regulation – such as application of price caps – should be applied.
“In principle economic regulation should be applied only if other remedies have been fully considered and found not to provide adequate protection to consumers against the risk of abuse,” it says.
“It follows that, to the extent that the Competition Commission is able to remedy to a sufficient degree those features of the airports market that are likely to have adverse effects on competition, there could be a case for withdrawing from sectoral regulation and relying on competition, and competition law, to protect the interests of consumers.”
Source: flightglobal.com's sister premium news site Air Transport Intelligence news
Source: FlightGlobal.com
