Civil Aviation Bill (HC Bill 275)

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Licences

14 Application for licence

(1) An application for a licence—

(a) must be made in the specified form and manner,

(b) 5must contain or be accompanied by the specified information, and

(c) must be published by the applicant in the specified form and manner
and within a period notified to the applicant by the CAA.

(2) On an application made and published in accordance with subsection (1), the
CAA must—

(a) 10grant the licence (see section 15), or

(b) refuse to grant the licence (see section 16),

unless the application is withdrawn.

(3) Subsection (4) applies if a person who is the operator of an airport area (“area
A”) on a day on which area A becomes a dominant area located at a dominant
15airport, or part of such an area, does not have a licence in respect of area A on
that day.

(4) The person is to be treated as having made and published an application for
such a licence in accordance with subsection (1).

(5) In subsection (1) “specified” means specified by the CAA.

(6) 20The CAA must publish a copy of the matters specified for the purposes of
subsection (1).

15 Granting licence

(1) Before granting a licence the CAA must—

(a) publish a notice in relation to the proposed licence,

(b) 25send a copy of the notice to the persons listed in subsection (2), and

(c) consider any representations about the proposal to grant the licence,
including the proposed conditions, that are made in the period
specified in the notice (and not withdrawn).

(2) Those persons are—

(a) 30the applicant for the licence, and

(b) such bodies representing airport operators or providers of air transport
services as the CAA considers appropriate.

(3) A notice under subsection (1) must—

(a) state that the CAA proposes to grant the licence to the applicant,

(b) 35specify the airport area for which it is to be granted,

(c) specify the airport at which the area is located,

(d) specify the conditions proposed to be included in the licence,

(e) give the CAA’s reasons for the proposed conditions, and

(f) specify a reasonable period for making representations.

(4) 40The CAA may withdraw a notice under subsection (1) at any time.

(5) If, after complying with subsections (1) to (3), the CAA decides to grant the
licence, it must—

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(a) publish a copy of the licence and a notice in relation to the licence, and

(b) send a copy of the licence and the notice to the persons listed in
subsection (2).

(6) The CAA is not to be treated as having complied with subsections (1) to (3) in
5relation to a licence granted to an applicant for an area if the conditions
included in the licence when it is granted differ significantly from the
conditions proposed in the notice under subsection (1) relating to the applicant
and the area (or, if more than one, the latest such notice).

(7) A notice under subsection (5) must—

(a) 10specify the date from which the licence comes into force (subject to
subsection (9)),

(b) give the CAA’s reasons for the conditions included in the licence,

(c) state how it has taken account of any representations made in the
period specified in the notice under subsection (1), and

(d) 15state the reason for any differences between the conditions included in
the licence and those proposed in the notice under subsection (1).

(8) The date specified under subsection (7)(a) must be a date falling after the end
of the period of 6 weeks beginning with the day on which the notice under
subsection (5) was published.

(9) 20If the CAA grants a licence to a person in respect of an airport area at a time
when the person is not the operator of any part of the area, the licence does not
come into force until the person becomes the operator of all or part of the area.

16 Refusing to grant licence

(1) The CAA may refuse to grant a licence for an airport area if—

(a) 25the CAA considers that the applicant is not the operator of the area and
is not likely to become the operator of the area,

(b) the area is not a dominant area (or part of a dominant area) and the
CAA considers that it is not likely to become a dominant area (or part
of a dominant area),

(c) 30the airport at which the area is located is not a dominant airport and the
CAA considers that it is not likely to become a dominant airport,

(d) the applicant is a person falling within subsection (2), or

(e) the applicant is connected to a person falling within subsection (2).

(2) A person falls within this subsection if—

(a) 35the person has previously held a licence in respect of the airport area
that is the subject of the application or an area that included all or part
of that airport area, and

(b) the licence was revoked in accordance with a relevant provision of the
licence.

(3) 40For the purposes of subsection (2)(b) a provision is a relevant provision of the
licence if it states that revocation of the licence entirely or partly in reliance on
that provision is relevant for the purposes of this section.

(4) Before refusing to grant a licence, the CAA must—

(a) publish a notice in relation to the proposed refusal,

(b) 45send a copy of the notice to the persons listed in subsection (5), and

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(c) consider any representations about the proposed refusal that are made
in the period specified in the notice (and not withdrawn).

(5) Those persons are—

(a) the applicant for the licence, and

(b) 5such bodies representing airport operators or providers of air transport
services as the CAA considers appropriate.

(6) A notice under subsection (4) must—

(a) state that the CAA proposes to refuse to grant the licence,

(b) specify the airport area in respect of which the application was made,

(c) 10specify the airport at which the area is located, and

(d) give the CAA’s reasons for the proposed refusal.

(7) The period specified in the notice must be a period of not less than 30 days
beginning with the day on which the notice is published.

(8) The CAA may withdraw a notice under subsection (4) at any time.

(9) 15If, after complying with subsections (4) to (7), the CAA decides to refuse to
grant the licence, it must—

(a) publish a notice its decision, and

(b) send a copy of the notice to the persons listed in subsection (5).

(10) A notice under subsection (9) must—

(a) 20specify the airport area in respect of which the application was made,

(b) specify the airport at which the area is located, and

(c) give the CAA’s reasons for the refusal.

17 Content and effect of licence

(1) A licence must include provision specifying—

(a) 25the airport area for which it is granted, and

(b) the airport at which the area is located.

(2) The specified area may consist of two or more separate areas if they form part
of the same airport.

(3) References in this Part to licence conditions do not include provision
30mentioned in subsection (1).

(4) A licence must—

(a) include provision about the circumstances in which it may be revoked
by the CAA, and

(b) provide that it may be revoked only in accordance with section 48.

(5) 35References in this Part to licence conditions include provision mentioned in
subsection (4), except in section 21(6).

(6) A licence continues in force until it is revoked in accordance with its
provisions.

(7) A licence is not valid unless it is in writing.

(8) 40A licence is not transferable.

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Licence conditions

18 Licence conditions

(1) A licence may include—

(a) such conditions as the CAA considers necessary or expedient having
5regard to the risk that the holder of the licence may engage in conduct
that amounts to an abuse of substantial market power in a market for
airport operation services (or for services that include airport operation
services), and

(b) such other conditions as the CAA considers necessary or expedient
10having regard to the CAA’s duties under section 1.

(2) For the purposes of this section conduct may, in particular, amount to an abuse
of substantial market power if it is conduct described in section 18(2)(a) to (d)
of the Competition Act 1998.

19 Price control conditions

(1) 15For the purposes of this Part a licence condition is a price control condition to
the extent that it regulates prices by—

(a) providing that the amount, or the maximum amount, that may be
charged is an amount specified in, or determined in accordance with,
the condition, or

(b) 20requiring the amount, or maximum amount, that may be charged to be
approved by the CAA.

(2) A licence must include such price control conditions as the CAA considers
necessary or expedient having regard to the risk referred to in section 18(1)(a).

(3) The duty in subsection (2) has effect subject to—

(a) 25the provision in this Chapter about the conditions that may be included
in the licence,

(b) the provision in this Chapter about granting licences, and

(c) the provision in this Chapter and in the licence about modifying licence
conditions.

(4) 30Subsection (5) applies where the CAA considers that the holder (“H”) of a
licence for an airport area engaged in conduct amounting to an abuse of
substantial market power by directly or indirectly imposing unfairly high
charges in respect of activities carried on in the airport area during—

(a) a period during which H was treated as having a licence in respect of
35the area by virtue of section 4;

(b) a period during which H would have been so treated but for the
suspension of a market power determination or operator
determination under Schedule 1.

(5) The licence may include such price control conditions as the CAA considers
40appropriate for the purpose of depriving the holder of the licence of an amount
not exceeding the amount which the CAA considers was earned from the
abuse during that period.

(6) A price control condition may make provision—

(a) by reference to the amount charged for particular goods or services;

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(b) by reference to the overall amount charged for a range of goods or
services.

(7) A licence that includes a price control condition must include conditions
specifying a period or periods for which the price control condition has effect.

20 5Conditions relating to CAA charges

(1) A licence may include conditions requiring the payment to the CAA of charges
determined under a scheme or regulations made under section 11 of the Civil
Aviation Act 1982 in respect of the carrying out of the CAA’s functions under
this Chapter.

(2) 10Such conditions may require the payment of charges on the grant of the licence
or while it continues in force (or both).

(3) The inclusion of such conditions does not prevent the CAA recovering charges
mentioned in subsection (1) as a debt due to it.

21 Content and effect of licence conditions

(1) 15Licence conditions may, in particular, include—

(a) provision for a condition to have effect or to cease to have effect at times
or in circumstances specified in, or determined in accordance with, a
condition,

(b) provision requiring the holder of the licence to enter into a contract or
20other arrangement for a purpose specified in a condition and on terms
specified in, or determined in accordance with, a condition,

(c) provision requiring the holder of the licence to comply with
requirements imposed (by directions or otherwise) by a specified
person,

(d) 25provision requiring the holder of the licence to do or not to do things
specified, or of a description specified, in the licence unless a specified
person consents to its not doing or doing those things,

(e) provision requiring the holder of the licence to refer a matter to a
specified person for approval or determination, and

(f) 30provision relating to activities carried on outside the airport area for
which the licence is granted.

(2) In subsection (1) the references to a specified person are to—

(a) a person specified, or of a description specified, in a condition for the
purpose concerned, and

(b) 35a person nominated for the purpose concerned by a person within
paragraph (a).

(3) A licence condition may include provision for its modification only if it
specifies or describes—

(a) the circumstances in which it may be modified,

(b) 40the types of modification that may be made, and

(c) the period or periods in which it may be modified.

(4) If a licence condition includes such provision, it may be modified in accordance
with that provision or in accordance with the provision made by this Chapter
about modifying licence conditions.

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(5) Where a licence condition is subject to an exception (however expressed)
relating to, or operating by reference to, financial arrangements entered into by
the holder of the licence, or a person connected to the holder of the licence,
before section 3 came into force, the licence may not—

(a) 5provide for the exception to cease to have effect at times or in
circumstances specified in, or determined in accordance with, a licence
condition, or

(b) provide for the CAA to determine which financial arrangements
benefit from the exception.

(6) 10A licence condition does not have effect at a time when—

(a) the holder of the licence is not the operator of any part of the airport
area for which the licence is granted, or

(b) that airport area is not a dominant area located at a dominant airport
(or part of such an area) and does not include all or part of such an area,

15and provision included in a licence under subsection (1)(a) has effect subject to
this subsection.

Modifying licences

22 Modifying licence conditions and licence area

(1) The CAA may modify a licence by modifying—

(a) 20the licence conditions, or

(b) the area for which the licence is granted,

subject to section 23.

(2) Before modifying a licence in reliance on this section, the CAA must—

(a) publish a notice in relation to the proposed modification,

(b) 25send a copy of the notice to the persons listed in subsection (3), and

(c) consider any representations about the proposed modification that are
made in the period specified in the notice (and not withdrawn).

(3) Those persons are—

(a) the holder of the licence, and

(b) 30such bodies representing airport operators or providers of air transport
services as the CAA considers appropriate.

(4) The notice under subsection (2) must—

(a) state that the CAA proposes to modify the licence,

(b) specify the proposed modification,

(c) 35give the CAA’s reasons for the proposed modification,

(d) state the effect of the proposed modification, and

(e) specify a reasonable period for making representations.

(5) If, after publishing the notice under subsection (2), the CAA decides not to
modify the licence in reliance on this section, the CAA must—

(a) 40publish a notice, giving its reasons, and

(b) send a copy of the notice to the persons listed in subsection (3).

(6) If, after complying with subsections (2) to (4) in relation to a modification, the
CAA decides to modify the licence in reliance on this section, the CAA must—

(a) publish a notice in relation to the modification, and

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(b) send a copy of the notice to the persons listed in subsection (3).

(7) The CAA is not to be treated as having complied with subsections (2) to (4) in
relation to a modification of a licence if the modification differs significantly
from the modification proposed in the notice under subsection (2).

(8) 5The notice under subsection (6) must—

(a) specify the modification,

(b) specify the date from which the modification has effect (subject to
paragraphs 7 and 11 to 13 of Schedule 2),

(c) give the CAA’s reasons for the modification,

(d) 10state the effect of the modification,

(e) state how it has taken account of any representations made in the
period specified in the notice under subsection (2), and

(f) state the reason for any differences between the modifications and
those set out in the notice given under subsection (2).

(9) 15In the case of a modification of a licence condition, the date specified under
subsection (8)(b) must fall after the end of the period of 6 weeks beginning with
the day on which the notice under subsection (6) was published (subject to
paragraph 20(2) of Schedule 2).

23 Restriction on power to modify

(1) 20This section applies where—

(a) a licence condition is subject to an exception (however expressed)
relating to, or operating by reference to, financial arrangements
specified or described in the licence,

(b) the financial arrangements were entered into by the holder of the
25licence, or a person connected to the holder of the licence, before section
3 came into force, and

(c) the CAA proposes to modify the licence by removing or restricting the
exception.

(2) The CAA may not make such a modification unless it has determined that—

(a) 30there has been a material change of circumstances since the day on
which the exception was included in the licence condition, and

(b) for users of air transport services, the benefits of the modification are
likely to outweigh any adverse effects.

(3) On or before the day on which it publishes a notice under section 22(2) in
35respect of a proposal to make such a modification, the CAA must—

(a) publish a notice of its determination under subsection (2) of this
section, giving its reasons for the determination, and

(b) send a copy of the notice to the persons listed in subsection (4).

(4) Those persons are—

(a) 40the holder of the licence, and

(b) such bodies representing airport operators or providers of transport
services as the CAA considers appropriate.

(5) For the purposes of subsection (1)(b), financial arrangements entered into after
section 3 came into force but pursuant to other financial arrangements entered
45into by the holder of the licence, or a person connected to the holder of the
licence, before that time are to be treated as entered into before that time.

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(6) In subsection (2) “material change of circumstances” includes a material
change in the terms of the financial arrangements.

Appeals against licence conditions etc

24 Appeal to Competition Commission: conditions of new licences

(1) 5An appeal lies to the Competition Commission against a decision by the CAA
under section 15 to include, or not to include, a condition in a licence when it
is granted.

(2) An appeal may be brought under this section only by—

(a) the holder of the licence, or

(b) 10a provider of air transport services whose interests are materially
affected by the decision.

(3) An appeal may be brought under this section only with the permission of the
Competition Commission.

(4) An application for permission to appeal under this section may be made only
15by a person who, if permission is granted, will be entitled to bring the appeal.

(5) The Competition Commission may refuse permission to appeal under this
section only on one of the following grounds—

(a) that the appeal is brought for reasons that are trivial or vexatious, or

(b) that the appeal does not have a reasonable prospect of success.

25 20Appeal to Competition Commission: modification of licence conditions

(1) An appeal lies to the Competition Commission against a decision by the CAA
to modify a licence condition under section 22.

(2) An appeal may be brought under this section only by—

(a) the holder of the licence, or

(b) 25a provider of air transport services whose interests are materially
affected by the decision.

(3) An appeal may be brought under this section only with the permission of the
Competition Commission.

(4) An application for permission to appeal under this section may be made only
30by a person who, if permission is granted, will be entitled to bring the appeal.

(5) The Competition Commission may refuse permission to appeal under this
section only on one of the following grounds—

(a) that the appeal is brought for reasons that are trivial or vexatious,

(b) that the appeal does not have a reasonable prospect of success, or

(c) 35that subsection (6) is satisfied.

(6) This subsection is satisfied if the appeal is brought—

(a) against a decision that relates entirely to a matter remitted to the CAA
following an earlier appeal under section 24 or this section, and

(b) on grounds that were considered, or could have been raised by the
40current applicant or a relevant connected person, as part of the earlier
appeal.

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(7) In subsection (6), in relation to an applicant, “relevant connected person”
means a person who was connected to the applicant at any time during the
consideration of the earlier appeal by the Competition Commission.

26 When appeals may be allowed

5The Competition Commission may allow an appeal under section 24 or 25 only
to the extent that it is satisfied that the decision appealed against was wrong on
one or more of the following grounds—

(a) that the decision was based on an error of fact;

(b) that the decision was wrong in law;

(c) 10that the decision was based on the wrong exercise of a discretion.

27 Determination of appeal

(1) Where it does not allow an appeal under section 24 or 25, the Competition
Commission must confirm the decision appealed against.

(2) Where it allows an appeal under section 24 or 25, the Competition Commission
15must do one or more of the following—

(a) quash the decision appealed against;

(b) remit the matter that is the subject of the decision appealed against to
the CAA for reconsideration and decision in accordance with this
Chapter and any directions given by the Commission;

(c) 20substitute its own decision for that of the CAA.

(3) Where it allows only part of an appeal under section 24 or 25—

(a) subsection (2) applies in relation to the part of the decision appealed
against in respect of which the appeal is allowed, and

(b) subsection (1) applies in relation to the rest of that decision.

(4) 25Where the Competition Commission substitutes its own decision for that of the
CAA, the Commission may give directions to—

(a) the CAA, and

(b) the holder of the licence.

(5) The Competition Commission must not give a direction under this section that
30requires a person to do anything that the person would not have power to do
apart from the direction.

(6) A person to whom a direction is given under this section must comply with it.

(7) A direction given under this section to a person other than the CAA is
enforceable—

(a) 35in England and Wales and Northern Ireland, as if it were an order of the
High Court, and

(b) in Scotland, as if it were an order of the Court of Session.

28 Determination of appeal: time limits

(1) The Competition Commission must determine an appeal under section 24 or
4025 against a decision in respect of a licence within the period of 24 weeks
beginning with the day on which the CAA published the relevant notice,
subject to subsections (3) to (6).

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(2) In subsection (1) “the relevant notice” means—

(a) in the case of an appeal under section 24, the notice published in
accordance with section 15 of the decision to grant the licence, and

(b) in the case of an appeal under section 25, the notice published in
5accordance with section 22 of the decision that is the subject of the
appeal.

(3) The Competition Commission may extend the appeal period by not more than
8 weeks if it is satisfied that there are good reasons for doing so.

(4) The Competition Commission may only extend the appeal period once in
10reliance on subsection (3).

(5) The Competition Commission may extend the appeal period by such period as
it considers appropriate if—

(a) there is an appeal to the Competition Appeal Tribunal under this
Chapter which the Commission considers may be relevant to the
15appeal under section 24 or 25, and

(b) the appeal to the Tribunal has not been determined or withdrawn.

(6) The Competition Commission may extend the appeal period more than once
in reliance on subsection (5).

(7) If the Competition Commission extends the appeal period it must—

(a) 20publish a notice stating the new time limit for determining the appeal,
and

(b) send a copy of the notice to the persons listed in subsection (8).

(8) Those persons are—

(a) the holder of the licence which is the subject of the appeal,

(b) 25if the appeal was brought by someone other than the holder of that
licence, the appellant,

(c) any other person with a qualifying interest in the decision that is the
subject of the appeal (see paragraph 34(4) of Schedule 2),

(d) such bodies representing airport operators or providers of air transport
30services as the Competition Commission considers appropriate, and

(e) the CAA.

(9) The Secretary of State may by regulations modify the periods of time specified
in this section.

(10) In this section “the appeal period”, in relation to an appeal under section 24 or
3525, means the period allowed for determining the appeal.

29 Determination of appeal: publication etc

(1) A determination made by the Competition Commission on an appeal under
section 24 or 25—

(a) must be contained in an order made by the Commission, and

(b) 40takes effect at the time specified in the order or determined in
accordance with the order.

(2) The order must set out the reasons for the determination.

(3) The Competition Commission must—