Memorandum submitted by the Airport Operators
Association
INTRODUCTION
AOA is the trade body that speaks for, and represents
the interests of, British Airports. It has in its membership all
of the UK's international and major regional airports, together
with a significant number that are engaged in business and general
aviation. A current list of our member airports is attached as
annex one.
SUBSTANTIVE SUBMISSION
The remit, structure and powers of the CAA:
The reputation, viability and development of
the UK's airports is intrinsically linked to their ongoing relationship
with the CAA. In gathering member views for this submission one
common thread that has emerged is the high degree of respect for
the CAA and the quality of its work. It is viewed by many members
as a good model and is believed to play no small part in the UK's
reputation as a leader in aviation. Several members have cited
examples of how CAA input has helped the industry recently, in
areas such as facilitating the granting of fifth freedom rights
to regional airports and its input in bilateral negotiations.
However, members do believe that there is more scope for the CAA
to work jointly with the industry in developing and revising safety
standards. We believe that this is increasingly appropriate given
the degree of expertise in the industry and the ever increasing
complexity that safety regulators must deal with.
Members do not believe that there is any case
to make substantive changes to the overall remit and scope of
the CAA's work. Historically this was not the case. Until several
years ago members believed that there was an inconsistency in
CAA's dual roles in its oversight of both safety regulation and
air traffic control. We believe that this conflict has now been
removed and that no other substantive conflict of interest exists.
A point related to CAA's remit, is the scope
for greater joint working with other government bodies to ensure
good communication and flow of expertise. A recent DfT consultation
provides an example of this. The DfT has estimated the costs of
bringing foreign registered aircraft into the UK system as £250,000,
based on the costs of re-licensing. In fact costs are likely to
be many times greater than this—in the order of tens of
millions of pounds. CAA regulatory requirements would be the main
driver in causing these costs. Closer working prior to the consultation
might have identified these costs. We believe it important that
CAA specialists are able to channel their expertise into the relevant
government branch and that likewise, DfT officials have a thorough
understanding of the CAA's regulatory approach and practice in
order to improve the effectiveness of policy making. We believe
that this should be pursued through greater efforts towards joint
working with CAA being involved at the early stages of policy
making and DfT officials having a thorough grasp of CAA regulation,
perhaps through the use of secondments or job rotation. Some members
have also commented that some CAA employees may be too specialised
and that there may be a case for multi-skilling of field personnel
to improve efficiency. Others note that there are skill shortages
in the parts of the CAA dealing with safety regulation at inspector
level and above. Consideration needs to be given to how to attract
and retain employees of the right calibre to these roles.
The effectiveness and efficiency of the CAA's
regulatory framework:
The CAA over time has developed a specifically
British model of safety regulation. In an increasingly globalised
world, this raises questions about the degree of harmonisation
between the UK and the rest of the world. The AOA strongly supports
the maintenance of high safety standards and believes that in
working to harmonise standards internationally there can be no
question of applying a lowest common denominator approach. However,
that is not to say that there are not uniquely British standards
that have been developed historically to which serious consideration
should be given with regard to appropriateness. Examples of this
have emerged recently following the DfT consultation on foreign
registered aircraft, which aims to stem the trend for aircraft
owners to maintain aircraft on foreign registers, while still
basing them in the UK. This has been a particular issue for smaller
airports, who cite the main reason for this trend as the particularly
onerous processes that pilots must follow to gain UK instrument
ratings and also modifications to aircraft in order to place them
on the UK register. Such modifications can be highly expensive
in the case of business jets and arguably lead to a loss of business
to the UK aviation sector and to the wider economy. There is a
strong case to say that if harmonised standards existed then the
root causes of this trend would be removed. We believe that there
is an opportunity to address this through the further extension
of EASA, but that it is critical that any attempt at harmonisation
is carefully developed and implemented in order not to create
a further tier of regulation.
In the same vein, there is a view among some
of our smaller general aviation airports that aspects of the CAA's
regulatory model that have been developed with large airports
in mind are not necessarily appropriate to businesses of their
size. This is not to say that their desire is for deregulation
(though that might be appropriate in some areas) but rather for
more appropriate regulation. Issues in this area have come to
light recently with the formation of the Light Aviation Airports
Study Group (LAASG), which has addressed issues such as the appropriateness
of CAA CAP 168 (the licensing of aerodromes) to small aerodromes
and also the requirements for Rescue and Fire Fighting Services
(RFFS). We believe that the CAA should be encouraged to take more
initiatives in areas such as these that might allow GA sector
airports to benefit from light touch" regulation, provided
that safety standards are not compromised. The present strategic
review of general aviation has the potential to provide a good
starting point for this.
With regard to efficiency, we strongly question
the need for the CAA to earn a rate of return on capital of 6%.
Rate of return is an accounting measure, which is best used to
compare the performance of companies in the same sector or where
a similar financial risk exists. Other similar public sector bodies,
such as those regulating the privatised utilities do not earn
a rate of return on investment. Our European competitors, some
of whom do not even bear the actual costs of their own national
regulatory regimes, do not experience the higher costs resulting
from this requirement. This disparity results in what is effectively
a double cost of regulation, which acts to place the UK's airports
at a competitive disadvantage.
The effectiveness and efficiency of the CAA in
the general discharge of its duties:
We believe that there is scope for greater ongoing
scrutiny of the CAA's cost base to ensure that it represents value
for money to our members. Some members have expressed concern
that there is no recompense to airfields for services that are
carried out on behalf of the CAA, such as where airports provide
services as part of the Local Competency Examiners Scheme. Another
area of concern is that overall costs to our members may increase
as the European Aviation Safety Agency's (EASA) remit expands.
We question whether there has been a commensurate reduction in
CAA's role, resourcing or cost pass-through associated with the
already achieved transfer of aircraft certification and maintenance
standards work to EASA, and are concerned at the potential for
similar dis-benefit when the responsibility for airport operations
is similarly transferred. We believe that CAA should reduce its
costs in proportion to the degree of work that EASA takes over
from it and demonstrate that this is occurring in order to re-assure
our members that they are not experiencing a drift towards double
regulation, with its associated on-costs.
On a related note we believe that there is scope
for the CAA to take more account of the increasingly competitive
and market based regime operating among UK airports. Some members
have commented that they have little scope to pass through cost
increases that occur as a result of increasing regulatory costs
in the UK. Attempts to pass through cost may result in airlines
moving to cheaper airports overseas. This is not to say that the
CAA should in any way cut corners, but should be mindful of the
fact that airports cannot simply pass through cost increases to
customers within the context of a globally competitive marketplace.
The effect of the growing international and EU
co-operation on the work of the CAA:
The AOA supports the idea of greater harmonisation
of regulatory safety standards across Europe. In principle this
is good for airports wishing to operate in continental markets
and also good for the industry if all EU countries (in terms of
aviation standards) are obliged to operate at the same standard
as leaders. However, we believe that the development of EASA must
take place in full consultation with the industry and are strongly
against any form of double or overlaid regulation, whether this
applies to the developing EASA or any other source of regulation.
It is also critical that the UK does not apply internationally
developed norms in an inflexible manner. Members suggest that
ICAO recommendations should not be automatically implemented as
standards, where recommended practices may be more appropriate.
We therefore see a potential role for EASA in safety certification
provided this does not lead to over-regulation. We believe that
it is critical that EASA develops at a pace that it can sustain
and ensures that it has consolidated current activities before
further expanding its remit. We believe that this will take several
years. During this process it is critical that ICAO is seen as
the overall standard and that EASA works closely with the industry
and the CAA within this long-established international framework
in order to avoid superfluous work and costs in developing new
standards where satisfactory standards already exist, or where
industry best practice can provide a solution. Some members have
expressed concern that without strong CAA involvement EASA may
result in a continental model of regulation that does not reflect
current ways of working in the UK. Similar concerns have been
raised in relation to CAA and the work carried out at ICAO. For
this reason, we would encourage the CAA to play an even stronger
part than it presently does in shaping and influencing both EASA
and ICAO.
15 November 2005
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