Draft Civil Aviation Bill - Transport Committee Contents


2  Airport economic regulation

Why regulate?

7. The trend in the aviation industry, across the UK and the EU, has long been towards market liberalisation. Aviation facilities and services, such as airports and airlines, are now predominantly provided by the private sector. In the UK, airlines compete for more than 200 million passengers each year, flying from more than 55 airports.[6] Public sector involvement in the industry is now primarily limited to security, safety, environment and international airspace issues.

8. Despite the competition that exists between airlines and airports, there are situations where competition is limited and airports are deemed to have significant market power. This is particularly the case in capacity-constrained south east England. Heathrow Airport, which served 32% of UK air transport passengers and 65% of cargo (by weight) in 2010,[7] is the UK's only international "hub" airport, with over 30% of passengers using it for connections to other destinations. It is more than double the size of all other UK airports combined in terms of both passenger numbers and flights.[8]

9. The DfT set out the rationale for economic regulation of airports in the policy paper accompanying the draft bill,[9] noting that effective competition is a crucial enabler of growth and that competitive markets are the best way in the long run to deliver the goods and services that consumers want at minimum cost. The DfT argues that in most sectors of the economy the degree of competitive rivalry between firms and the threat of competition law is sufficient to protect consumers from the risk of firms exploiting their market power, for example by charging unreasonably high prices or by providing unreasonably low levels of service quality. However, in some sectors of the economy—typically those which used to be publically-owned monopolies and where circumstances limit the prospect for effective competition—economic regulation is needed to protect consumers and companies.

10. The CAA made clear that it believes consumers are best served by competitive markets and that it had often found itself in a position of arguing that regulation might not be necessary.[10] However, in cases where service providers have significant market power, regulation is required.[11] Airlines also support continued economic regulation of major airports. Dr Humphreys, from the British Air Transport Association (BATA), argued that the three main London airports, Heathrow, Gatwick and Stansted, still have significant levels of monopoly power and should continue to be regulated.[12] Sian Foster, from Virgin Atlantic, explained further:

    Gatwick is full at peak times, and Heathrow is full throughout the day. If there was the competition, we would have grown elsewhere in the UK, but the conditions at Gatwick and Heathrow are not replicable elsewhere and we need them.[13]

There seems to be little disagreement that Heathrow has substantial market power but Gatwick Airport, now no longer owned by BAA, has made a case to the CAA that it does not have a level of market dominance which requires regulation.[14] The same might be said about Stansted Airport but, as with Gatwick Airport, airlines might not agree.[15]

11. Some commentators, such as the Adam Smith Institute,[16] have suggested that economic regulation of airports is unnecessary and even harmful, and that the market should be allowed to find its own level. However, these commentators also acknowledge that government policy, planning restrictions and environmental factors prevent the busiest airports from expanding and fully responding to market forces.[17] Given these constraints on the operation of the aviation market, we concur with our witnesses that some form of economic regulation is necessary.

Existing regulatory framework

12. The existing framework for airport economic regulation is governed principally by the Airports Act 1986, which stipulates that airports with an annual turnover of over £1 million in two of the last three years should be covered by the provisions of economic regulation. Such airports require permission from the CAA to levy airport charges and are subject to a number of accounting conditions.[18] The CAA may also impose other conditions to remedy any anti-competitive behaviour.

13. Under the Act the Secretary of State may "designate" airports to be subject to mandatory conditions, including the setting of "price caps" for the charges that they may levy on airlines,[19] following a five-yearly (quinquennial) review by the CAA and reference to the Competition Commission. At the time of the 1986 Act, four airports were designated: Heathrow, Gatwick, Stansted and Manchester. Manchester Airport was de-designated in January 2008 and is no longer subject to a price cap. The 1986 Act did not set out formal criteria for airport designation. In May 2007 the DfT published proposals for formal criteria: essentially, airports with substantial market power should be designated.[20] These criteria have been carried forward into the draft Civil Aviation Bill as the basis for assessing which airports should be licensed and subject to economic regulation under the new regime.

Background to the proposed changes

CALLS FOR REGULATORY CHANGE

14. In 2006, in its report on the CAA, the previous Transport Committee recommended that Government review the following matters:

  • CAA's price control and airport designation mechanisms;
  • necessity of references to the Competition Commission for airport price cap decisions; and
  • the benefits to using a constructive engagement process in price cap reviews for designated airports.[21]

In 2007 the CAA gave evidence to the House of Lords Select Committee on Regulators that the Airports Act did not give the Authority the necessary powers to regulate airports effectively.[22] Following these calls for change, the Government commissioned a number of reviews and consultations on reforming the regulatory framework. The key reports are briefly summarised below.

PILLING STRATEGIC REVIEW OF THE CAA

15. In 2008, the DfT commissioned Sir Joseph Pilling, a former senior civil servant, to review the role and function of the CAA. His report included two recommendations relating to airport economic regulation:

    [...] that the DfT review of the economic regulation of airports should consider whether the CAA's current duty towards users should be amended to give greater weight to passengers or consumers; and

    [...] that the Department propose amending the existing legislation to remove the automatic statutory reference to the Competition Commission in the setting of airport price caps and establish this organisation as the appellate body.[23]

In November 2008, the then Secretary of State for Transport, Geoff Hoon, announced his broad acceptance of the recommendations and his intention to work with the CAA to implement the necessary changes.[24]

COMPETITION COMMISSION'S BAA AIRPORTS INQUIRY

16. In 2006 the Competition Commission began an investigation into BAA's market dominance. At this point, BAA owned the UK's three largest airports (all in London), Scotland's three largest airports (Glasgow, Edinburgh and Aberdeen) and a number of other regional airports. The investigation has resulted in major changes to BAA's airport ownership: BAA sold Gatwick Airport in 2008 and announced in 2011 that it would sell Edinburgh Airport.[25] It continues to oppose the ruling by the Competition Commission that it should also sell Stansted Airport.

17. Though the Competition Commission's inquiry was primarily concerned with BAA's airport ownership, the Commission also voiced concerns regarding the current framework for airport economic regulation. It found that the existing system of economic regulation distorted competition between airlines by adversely affecting the level, specification and timing of investment and the appropriate level and quality of service to passengers and airlines as a result of:

  • the absence of statutory duties and economic licence provisions;
  • the limited scope for the regulator to act between quinquennial reviews, including by means of agreed changes to licence provisions; and
  • the narrow focus of the CAA's statutory duties in economic regulation (which is to set maximum airport charges at designated airports every five years) and the way in which the CAA has given effect to its four statutory objectives [see paragraph 23 below] in fulfilling these duties.[26]

DFT CONSULTATION ON ECONOMIC REGULATION

18. In April 2008, the DfT embarked upon a review of the economic regulation of airports, which included the establishment of an expert panel, chaired by Professor Martin Cave of Warwick University, and invited evidence from interested parties covering:

  • What should be the objectives of effective economic regulation of airports?
  • What are the weaknesses in the current systems of regulation?
  • What lessons can be learned from alternative regulatory systems?

19. In March 2009, the DfT published the findings of the expert panel and consulted on proposals for reform of the economic regulation regime for airports, which were based on the findings of the review.[27] This consultation introduced the three key principles for future regulation, namely putting the passenger experience first, providing a flexible set of regulatory tools and adhering to the principles of 'Better Regulation'. It also introduced the concept of a licence-based approach.

20. In December 2009, the DfT announced its decision on the future of airport economic regulation, which largely followed the proposals in the consultation document. The proposals form the basis of the draft bill now being considered, although there have been a small number of significant changes following continued dialogue with the industry since 2009, notably the granting of a right of appeal against licence conditions to the airlines and the removal of the role of Passenger Focus as representative of user interests.

WINTER WEATHER RESILIENCE

21. A compounding factor in recent years has been the failure of some airport services to function during severe winter weather events, with unacceptable consequences for passengers and the economy. Heavy snow over the last three winters forced a reconsideration of airport capabilities and services. In our report, Keeping the UK moving: The impact on transport of the winter weather in December 2010, we cautioned that the UK's airports were not adequately equipped to deal with winter weather events. We recommended that airports should develop passenger welfare plans and that Government oversight of airports' snow and major incident plans should be strengthened.[28]

22. Concurrently with our inquiry, Professor David Begg, non-executive director of BAA, undertook a review on behalf of Heathrow Airport.[29] Several government departments, including the DfT, also undertook a wide-ranging review of the case for further investment in resilience of the road, rail and aviation infrastructure. Its conclusions placed considerable weight on the role that the bill would play in mitigating the impacts of severe weather events on airports.[30]

Proposed regulatory framework

PRIMARY DUTY TO AIR TRANSPORT USERS

23. One of the primary objectives of the draft bill is to reorient the CAA's economic regulation duties towards protecting the interests of air transport users. Under current law, the CAA has an overall duty to "further the reasonable interests of users of air transport services."[31] However, with respect to economic regulation, it has four duties of equal weight:

  • to "further the reasonable interests of users of airports within the United Kingdom."[32]
  • to promote the efficient, economic and profitable operation of airports;
  • to encourage investment; and
  • to impose minimum restrictions consistent with the performance by the CAA of its other functions under this part of the Act.

It has been often been argued that there is some tension between these objectives, particularly in terms of encouraging investment whilst protecting the interests of air transport users and promoting efficiency. This was made clear by the DfT in its decision on its review of Economic Regulation:

    The Consultation document noted that some stakeholders were unclear about how the CAA balances its current duties and others were concerned it placed undue prominence on specific duties (for example the Competition Commission raised concerns that the CAA may place undue prominence on its duty to impose minimum restrictions).[33]

24. The draft bill would elevate the interests of air transport users by giving the CAA one primary duty to "further the interests of users of air transport services regarding the range, availability, continuity, cost and quality of airport operation services."[34] Despite this single primary duty, the bill also requires the CAA to have regard, where appropriate, to promoting competition in the provision of airport services and to a number of other secondary duties, namely:

  • the ability of the airport operator to finance its activities;
  • securing that all reasonable demands for air transport services are met;
  • the need to promote economy and efficiency in the provision of airport operation services by each airport licence holder;
  • guidance issued by the Secretary of State;
  • international obligations; and
  • the principles of good regulation.

25. Although it is made clear that the CAA must always give priority to the air transport user, the Authority is still able to interpret its full range of duties with a high degree of discretion and judgement, particularly where there may be differences between various classes of user or between requirements in terms of the range, availability, continuity, cost and quality of airport operations.

26. The Government argues that this new overarching duty and other measures included in the bill would benefit passengers and shippers of cargo. Aviation minister, Rt Hon Theresa Villiers MP, told us that the new regulatory regime has been designed to give the CAA the tools it needs to ensure that passengers' needs are met. A flexible licensing scheme, she said, would "give the CAA much more effective powers to intervene where the airport is not providing the quality of service that passengers want."[35]

27. These changes would bring the CAA in line with the UK's other economic regulators that share a common primary duty to protect the interests of the end users of the service.[36] This duty would also enable the CAA to comply with the Government's Principles for Economic Regulation.[37] The CAA welcomed this clarification of its duties in respect of airport economic regulation. Airport and airline industry witnesses were also broadly supportive of the change to the CAA's primary duty, albeit with certain reservations which we address below.

DEFINITION OF AIR TRANSPORT USERS

28. In its policy paper, the Government defines the consumer as "passengers and owners of cargo both present and future" but this definition is omitted from the draft bill.[38] We heard concerns that the draft bill does not clearly define who constitutes an air transport user. The Airport Operators Association, for example, said that a clearer definition was needed in the legislation, to avoid confusion and disagreement in the future.[39]

29. Manchester Airports Group was particularly concerned that the bill or explanatory material should make clear that airlines were excluded from the definition of users of air transport services.[40] The airlines, however, took the opposite view, pointing out that, although not the end users of air transport services for which they are often the providers, airlines are the primary customers of the airports. Dr Barry Humphreys of the British Air Transport Association told us:

    We would like to see the role of the airlines more formally recognised in the duties given to the CAA. Ideally, we would like to see it done in the primary duty, but if that is not possible, there should be at least a recognition of it in the secondary duties given to the CAA. We understand that the CAA is required to consult airlines and other stakeholders, but in our view that is not sufficient. There needs to be a legal basis for taking account of the views of what, after all, are the principal customers of the airports.[41]

30. Some stakeholders have suggested that there is a risk that airports would be allowed to upgrade facilities in the interests of future passengers but at the expense of current passengers. In other words, if airports invest too much in their capital stock to benefit future passengers, it may cause prices to rise to the detriment of current and prospective passengers. For example Sian Foster of Virgin Atlantic Airways told us in oral evidence:

    [...] this Bill will provide a shift away from fixed five-year terms, where you are negotiating charges seven years in advance of when they will actually be paid by the passengers. That means, in our case, that passenger charges have gone up by 50% in the last three years, at a time when the rest of the industry has been massively driving down on the cost of doing business, becoming more efficient and focusing on affordability for our consumers.[42]

31. We recommend greater clarity in the wording of the bill's definition of users of air transport services. We suggest that users be defined as "passengers and shippers of cargo both present and future". There should also be more specificity in the CAA guidance regarding the relative weight that should be put on current versus future air transport users' interests. We further recommend that the special position of airlines be recognised by way of a secondary duty in the bill.

32. Although not strictly relevant to the drafting of the bill, a further concern relates to how the views of passengers and, in particular, of users of air cargo services will be captured. This is pertinent to proposal to give the CAA a duty to require air transport service providers to publish information to inform consumer choice. (See Chapter 3.) The CAA proposes to establish an Aviation Consumer Advocacy Panel but the CAA's answers to our questions were unclear as to how the panel will operate and whether it will represent the full range of users' interests.[43] It is not immediately apparent in what way this panel will be an improvement over the previous Air Transport Users Council which was disbanded in March 2011.

33. We recommend that the CAA clarify how it intends to ascertain the interests of transport users and how the proposed Aviation Consumer Advocacy Panel will relate to the regulatory process.

ENVIRONMENTAL DUTY

34. The previous Government's list of proposed secondary duties for the CAA, in respect of economic regulation, included:

"to have regard to the airport operator's legal obligations to comply with applicable environmental and planning law."[44]

This duty was omitted from the draft bill. Mrs Villiers said this was because it was unnecessary as there was "absolutely no doubt" that costs incurred by airports in respect compliance with environmental law and regulations could be included in an airports regulatory asset base (see footnote 19).[45] The Minister also suggested that a supplementary duty on the environment was unnecessary because airports voluntarily invest in improving their environmental performance because it is in their commercial interest.[46]

35. The aviation industry is generally opposed to the inclusion of a specific environmental duty, fearing that it may lead to additional costs. BA stated that it would be misguided to include environmental provisions in legislation on economic regulation. It was concerned that if environmental objectives were pursued through this route by the CAA, the impacts would fall disproportionately on the regulated airports—such as Heathrow—where BA's operations are concentrated.[47]

36. Brian Ross, representing the umbrella organisation AirportWatch, argued that omitting an environmental duty from the bill could result in decreased environmental performance by airports. He said of the Government's decision not to include the environmental duty:

    This is contrary to earlier Government promises and gives rise to serious concerns amongst those who live close to the UK's major airports that the CAA will in future be powerless to prevent airport operators from cutting back on measures which reduce or mitigate the effects of their operations upon local communities and the environment.[48]

37. Responding to questions about the absence of an environmental duty, Dame Deirdre Hutton, Chair of the CAA, noted that the Secretary of State for Transport had included reference to environmental duties in a letter about the CAA's objectives and concluded that "we do have environmental duties and powers coming at us from a range of different directions".[49] The letter calls on the CAA, amongst other things, to

    develop its capability to be able to consider and advise the Department on future policy challenges which require policy solutions, with particular reference to the environmental impacts of the aviation industry;[50]

This seems to be a limited remit and not connected with the scope of the draft bill.[51]

38. Without giving the CAA a supplementary duty on the environment in relation to its economic regulation role, there is some risk that airports may be reluctant to invest in improving environmental performance. Whilst, as the Minister says, there may be "absolutely no doubt" about measures taken to comply with statutory environmental obligations, there remains a doubt about whether the costs of discretionary measures, such as improved public transport access, can be recovered by airports in charges to airlines.

LICENSING

39. The draft bill aims to improve airport services for current and future passengers and shippers of cargo. It would do this principally through a new licence system for designated airports, by means of which the CAA would be allowed to set price caps and certain conditions. Only the small number of designated airports would be subject to licensing. The criteria for deciding if an airport should be designated would not change under the proposals in the draft bill. Similarly, price caps are likely to be calculated in the same way as they are at present—on the airport's regulatory asset base. Since November 2011, all airports with over five million passengers a year have been subjected to the European Airport Charges Directive and this will also continue.[52]

40. Licences may include financial requirements, such as standards for minimum credit worthiness and continuity of service plans that would protect consumers against bankruptcy of airport operators.[53] Licences could also require airports to plan more effectively for winter weather events, such as snow. The CAA has published a first draft of what such licence conditions might include. In our report, Keeping the UK Moving: The impact on transport of the winter weather in December 2010, we recommended that airports be required to develop passenger welfare plans and to provide support to stranded passengers during periods of disruption. We are disappointed that these conditions were not included in the CAA's draft licence and expect them to be taken into account when the CAA sets licence conditions.

41. BAA highlighted the risk that the draft licence conditions could add significant regulatory burden and costs to their operations:

    The draft licence as it stands is extremely vague, obliging the licensee to operate an "efficient and reliable airport". While unobjectionable as an idea, it is not useful as a legal obligation because it is unclear what, specifically, it means and so is open to wide interpretation and thus uncertainty...[54]

Gatwick Airport shares BAA's concerns:

    The operational resilience licence condition could be taken to imply that the regulator should have oversight of all parties at an airport, using the vehicle of the airport operator's licence to do so. We believe that care needs to be taken to ensure that it is properly drafted.[55]

42. Iain Osborne, Group Director of Regulatory Policy at the CAA, responded to these concerns:

    Our role is very much to make clear what is expected of the airport in a situation where the market is not going to provide that discipline. Quality and resilience is a very good area. We discovered, last winter, that there was widespread confusion about who was supposed to do what. The result was that people did not do what was needful. Regulation can provide a useful discipline in making clear what the responsibilities of the different parties are and, indeed, of providing sanctions where people fail to deliver those responsibilities.[56]

43. We welcome the intention to improve the financial and operational performance of airports. There is a risk, however, that licence conditions, and their associated costs to airports, may not be proportionate to the benefits delivered to the users of air transport services. We recommend that the bill be amended to require the CAA to provide impact assessments for the licence conditions imposed on airports.

PASSENGER SATISFACTION

44. Survey evidence suggests that the areas of greatest passenger dissatisfaction at airports are not within the control of airports and would thus not be affected by licensing requirements. An ONS Omnibus Survey, conducted in February 2010, revealed that passengers were largely satisfied with their experiences at airports but were not equally satisfied with all aspects of service. The areas of least satisfaction (less than 75% satisfied) concerned information provided on bringing goods into the UK (64% satisfied), destinations served by nearest airport (65% satisfied), baggage collection (73% satisfied), and cost of flights (74% satisfied).[57] The highest levels of satisfaction were for provision of flight information (91% satisfied), timeliness of flights (88% satisfied), and experiences at check-in (85% satisfied).[58]

45. In its own survey of passenger satisfaction with airports, the CAA discovered that immigration waiting times were also an area of concern. Fewer than 70% of passengers at London's three major airports were satisfied with immigration services, with 8% of surveyed passengers waiting more than 20 minutes.[59] The UK Border Agency (UKBA) manages immigration at airports. The draft bill does not include provisions regarding immigration standards, which are a matter for the Home Secretary. The CAA also found passenger dissatisfaction at points where disparate service providers interact, particularly in times of disruption.

46. Where possible, airport licences should be structured so that they address key areas of passenger dissatisfaction. Immigration and baggage handling are two services which are not within the remit of airports but strongly impact on passengers' satisfaction with airports. If the Government is serious about improving the passenger experience at airports, it should consider, in parallel, how to address improving service standards by other airport service providers, such as UKBA and private baggage handling companies.

APPEALS MECHANISM

47. In an effort to improve regulatory accountability, the bill proposes a symmetrical appeals mechanism that would allow airports and airlines to appeal, to the Competition Commission, the licence conditions set by the CAA. It would also allow the Secretary of State and persons "whose interests are materially affected" to appeal airport designation decisions by the CAA to the Competition Commission.[60] Under the current regulatory regime, both the Secretary of State's decisions on airport designation and any price caps or conditions set by the CAA can only be challenged by judicial review, which limits the ability of stakeholders to contest regulatory decisions.

48. The appeals provisions have thus been welcomed by the airlines and airports. Both groups, however, expressed concern in written and oral evidence that the draft bill does not adequately prevent frivolous or vexatious appeals (appeals made to delay penalties or charges with little factual or legal basis). Such appeals, they claim, would slow down the regulatory process and could negate any efficiency improvements that the draft bill tries to achieve.

49. The Government acknowledges that the number of appeals made in this new regime would likely be greater than in the past. However, it suggests that "the design of the system should deter speculative appeals and help to reduce the level of regulatory risk."[61]

50. Witnesses raised concerns that unclear definitions in the appeals mechanism could also contribute to the risk of frivolous appeals. Clauses 24 and 25 state that appeals against licence conditions may only be made by licence holders and "providers of air transport services whose interests are materially affected by the decision."[62] Gatwick Airport says that without a more comprehensive definition of when an air transport service provider can be considered "materially affected", there is a risk that appeals would be made frivolously.[63] BAA concurred that under the current wording of the bill, airlines would have the incentive to appeal every price-related decision, which would slow down the regulatory process and increase costs.[64] Airline representatives said that, based on past experience, appeals from airports were equally likely.[65]

51. The same potential lack of clarity also arises with the definition of "materially affected" persons in respect of an appeal over designation to the Competition Appeals Tribunal as set out in Schedule 1 to the bill. Here, the scope for parties to appeal decisions is potentially wider and could lead to appeals from a wide variety of parties who could claim to have their interests materially affected by the activities of an airport.

52. We are concerned that airports and airlines might use frivolous or vexatious appeals to delay licence conditions to which they are opposed, to the detriment of users of air transport services. We recommend that the Government ensures that the Competition Commission and other relevant appeals bodies have the power to strike out frivolous or vexatious appeals. We further recommend that the Government specifies more clearly what constitutes a "materially affected" provider of air transport services in the bill, to prevent frivolous appeals by airports and airlines and in respect of "materially affected" persons in relation to appeals on designation.

INTER-TERMINAL COMPETITION

53. Both Gatwick Airport Ltd[66] and Manchester Airports Group,[67] supported by the Airport Operators Association,[68] expressed concerns about the provisions permitting inter-terminal competition to be introduced at airports.[69] These enabling provisions have been included in the draft bill as a response to a recommendation from the Competition Commission that inter-terminal competition should not be precluded under any new regulatory regime. The clauses in the bill simply provide for the circumstance where there might be different operators of parts of an airport with different regulatory treatment. These circumstances could only arise if imposed through a market investigation or as a result of a decision by the airport operator itself. The bill does not mandate that inter-terminal competition should take place but merely ensures that the regulatory framework can accommodate it should the eventuality arise.[70] In view of the lack of experience of inter-terminal competition in the UK to date, we think this is a reasonable provision to include in the bill.


6   CAA, UK Airport Statistics, 2011-2010, http://www.caa.co.uk Back

7   Ibid. Back

8   Ibid. Back

9   Draft Civil Aviation Bill: An effective regulatory framework for UK aviation: Policy Paper, Cm 8234-I, November 2011 Back

10   Q109 [Mr Haines] Back

11   Q 86 [Mr Haines] Back

12   Q 74  Back

13   Q 75  Back

14   Q 3 [Mr Hanks] and Ev 57  Back

15   Qq 96 and 109 Back

16   Karthik Reddy, Think Piece on airline regulation, Adam Smith Institute, 2010, http://www.adamsmith.org Back

17   The Coalition Government has ruled out additional runways at Heathrow, Gatwick and Stansted Airports. It is due to publish a Sustainable Framework for Aviation for consultation in March 2012. The CAA has recently published a policy paper which identifies the need for additional airport capacity and calls for National Policy Statement for Airports, CAA, Aviation Policy for the Future, January 2012.  Back

18   In this context, airport charges cover those levied directly on airlines or air passengers. Back

19   The charges are based on an airport's regulatory asset base (RAB), which is the value of its regulated capital and operational assets, and the rate of return required to encourage investment in new facilities and infrastructure, taking into account the operating costs of the airport and its anticipated non-regulated revenues. Back

20   Department for Transport, Consultation on proposed designation and de-designation criteria for airports, 26 February 2007. These criteria were used in 2007 to confirm the designated status of Stansted Airport and to de-designate Manchester Airport. Back

21   Transport Committee, The work of the Civil Aviation Authority (thirteenth report of session 2005-2006), HC 809, 8 November 2006, paragraphs 31-36.  Back

22   House of Lords Select Committee on the Regulators, First Report of Session 2006-07, UK Economic Regulators, Vol II: Evidence, 13 November 2007, pp 51-67 Back

23   Department for Transport, Report of the strategic review of the CAA, June 2008, paragraphs 272 and 274 Back

24   HC Deb 26 November 2008, cc106-107WS Back

25   BAA announced in October 2011 that it plans to sell Edinburgh Airport by summer 2012 ("BAA to sell Edinburgh Airport," BAA, 19 Oct 2011) Back

26   Competition Commission, BAA airports market investigation: A report on the supply of airport services by BAA in the UK, 19 March 2009, p 270 Back

27   Department for Transport, Report of the independent panel on airport regulation, March 2009 Back

28   Transport Committee, Fifth Report of Session 2010-2012, Keeping the UK moving: The impact on transport of the winter weather in December 2010, HC 794 Back

29   Heathrow Winter Resilience Enquiry, Report of the Heathrow Winter Resilience Enquiry, March 2011 Back

30   Department for Transport, Department for Energy and Climate Chance and Department for Environment, Food and Rural Affairs, Winter Resilience in Transport: an assessment of the case for additional investment, December 2011 Back

31   Civil Aviation Act1982, Part I, Clause 4, Subsection (1) Back

32   Airports Act1986, Part IV, Clause 39, Section (2) Back

33   Department for Transport, Reforming the Framework for the Economic Regulation of Airports: Decision Document, December 2009, Paragraph 3.13 Back

34   Draft Civil Aviation Bill, cl. 1, subsection (1) Back

35   Q 147  Back

36   See, for example, Ofgem, About Us, http://www.ofgem.gov.uk Back

37   Department for Business Innovation and Skills, Principles of Economic Regulation, April 2011 Back

38   Draft Civil Aviation Bill: An effective regulatory framework for UK aviation: Policy Paper, Cm 8234-I, November 2011, p 12 Back

39   Ev 60 and Ev w5 [Manchester Airport Group] Back

40   Ev w5  Back

41   Q 54 Back

42   Q 64 Back

43   Qq 126-136 Back

44   Ev 33 Back

45   Qq 167-177  Back

46   Q 164  Back

47   Ev 60  Back

48   Ev 33  Back

49   Q 106  Back

50   Letter from Rt Hon Philip Hammond MP, Secretary of State for Transport, to Dame Deidre Hutton CBE, Chair of the CAA, 2 February 2011 Back

51   The CAA has recently published a consultation paper on its environmental programme, CAA, CAA and the Environment, January 2012. Back

52   The main aim of the Directive is to establish a common EU framework regulating the essential features of airport charges, based on the ICAO principles of non-discrimination, transparency and consultation with users, European Airport Charges Directive 2009/12/EC.  Back

53   Department for Transport, Reforming the Framework for the Economic Regulation of Airports: Decision Document, December 2009 Back

54   Ev 40  Back

55   Q 41 [Mr Hanks] Back

56   Q 93  Back

57   Security is managed by airports and falls under the Service Quality Rebate scheme, which requires airports to meet security waiting time standards or compensate airlines if they fail to meet these standards. Back

58   Office of National Statistics, Omnibus Survey , February 2010, p 9 Back

59   CAA Consumer Protection Group, The Through Airport Passenger Experience: An assessment of the passenger experience and airport operations at Heathrow, Gatwick, Stansted and Manchester airports, 9 March 2009 Back

60   Draft Civil Aviation Bill: An effective regulatory framework for UK aviation: Policy Paper, Cm 8234-I, November 2011, p 13 Back

61   Draft Civil Aviation Bill: An effective regulatory framework for UK aviation: Impact Assessment, Cm 8234-III, November 2011, p 10 Back

62   Draft Civil Aviation Bill, cl. 24, subsection (2) Back

63   Ev 58  Back

64   Ev 39  Back

65   Q 62 [Dr Humpreys] Back

66   Ev 55  Back

67   Ev w5  Back

68   Ev 60  Back

69   Inter alia at clauses 4, 5 and 6 of the draft bill. Back

70   Qq 101-102 Back


 
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Prepared 19 January 2012