81. The draft Civil Aviation Bill is clearly welcome
by the aviation industry, including airlines and airports, which
believe that it offers a more flexible and appropriate system
for economic regulation of airports. The CAA also welcomes the
changes to its duties, powers and governance, offered by the draft
bill. Although the period for pre-legislative scrutiny has been
shorter than previously planned, the industry is pleased to see
the bill move up the parliamentary timetable. As the witness from
Virgin Atlantic commented:
In general, the Bill is moving very quickly,
but the matter needs to be addressed. We have had the same regulatory
framework for almost the same length of time as my airline has
been in existence.
Most of the draft bill has been subject to detailed
review and consultation over a lengthy period and, allowing for
the specific issues raised earlier in this report, it appears
to offer a better way to regulate UK airports in the future.
SUPPORTING ECONOMIC GROWTH
82. The Government has claimed that the draft bill
would promote economic growth, reducing distortion to competition
between airlines and reducing costs for the aviation industry,
through a better system of economic regulation. In addition, changes
to aviation security regulation would "potentially [...]
save [the industry] considerable amounts of money".
The Impact Assessment estimates that the interventions contained
in the bill would have, in total, a Net Present Value of £149.8
83. Other than the Minister, witnesses to our inquiry
were more cautious about the impact of the bill on economic growth.
The Chief Executive of the CAA pointed out that the CAA is an
independent regulator and has no locus to stimulate economic growth.
Industry witnesses were concerned about how the legislation would
be implemented and its impact on costs. They pointed to the parlous
financial situation of some regional airports, the cumulative
cost increases faced by the industry
and the danger of policy being imposed without concern for the
The provisions in the Bill could cost a 10-million
passenger airport in the order of £200,000 a year, which
is material for them. Airport MDs often say to me, "I have
spent ages trying to save £50,000 out of my costs, but in
a stroke those savings have been wiped out by a tweak to the regulations."
It is not about these provisions per se; it is more about their
cumulative effect on the viability of regional airports.
Some £5 million of security regulation costs
will be transferred to the aviation industry from the taxpayer.
The other costs will depend on the approach and efficiency of
84. The UK needs a healthy, competitive and sustainable
aviation industry, which includes regional airports and air services.
The bill provides new powers for the CAA to undertake its regulatory
roles, and some new duties. The aviation industry has some concerns
about the way in which the CAA will implement some of these provisions.
Given the greater degree of competition that now exists between
airports in the south east of England and the difficult business
conditions facing many regional airports, we are clear that the
CAA should undertake its economic regulatory duties with a relatively
light touch. We believe this would be consistent with the Government's
better regulation principles and with what the Government would
expect of the CAA. The Government should be open to proposals
and suggestions for amendments to the bill to reinforce this principle.
118 Q 73 [Sian Foster] Back
Q 152 [Mrs Villiers] Back
This is the "best estimate". The estimate ranges from
-£91.4 million (low) to £919.3 million (high). Department
for Transport, Impact Assessment, p 6. Back
Q 137 Back
Q 18 [Mr Siddall] Back
Q 65 [Dr Humphreys] Back
Q 18 [Mr Siddall] Back