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The CAA undertakes analysis of the market power held by airports

CAA, publishes competition guidelines to help with future assessments of airport market power

As part of its work to promote competition and protect consumers the CAA is publishing a set of competition guidelines, which explain how it will approach the analysis of an airport’s market power.

The CAA undertakes analysis of the market power held by airports in order to protect consumers from anti-competitive behaviour and ensure that regulation is fit-for-purpose. Today’s competition guidelines are designed to support this process and are intended to help stakeholders understand how the CAA will undertake such analysis. They have been developed to complement the CAA’s work to regulate airports in a flexible and proportionate way, which will be supported by the Government’s proposals to modernise the CAA’s outdated legislative framework and place the passenger at the heart of economic regulation. They also aid regulatory certainty for stakeholders by providing guidance on how changes in the competitive environment will be assessed; something that is particularly important following BAA’s sale of Gatwick and the Competition Commission’s ruling that BAA must also sell Stansted.

Commenting on the publication, Iain Osborne, Group Director of Regulatory Policy for the CAA said, “ Publishing today’s guidelines is part of our ongoing work to improve how regulation works to protect passengers, supported by Government’s proposed reforms to give us a more flexible set of tools to help to place the passenger at the heart of economic regulation. We have worked closely with industry in developing the guidelines and believe they will give our stakeholders a more certain understanding of how future market power assessments will be carried out by the CAA.”

The guidelines are based around broad principles and are designed as a high-level guide to how future in-depth economic analysis will be undertaken. They set out the issues that will be considered as part of future competition assessments and highlight the links between those issues and relevant existing guidance and case law. However, they are not an attempt to actually make a competition assessment or judge how much market power an individual airport holds, nor do they try to pre-empt the in-depth process of analysis and consultation that would lead to such a judgement being taken. The CAA will now be turning its attention to the analysis of Heathrow, Gatwick and Stansted, in close cooperation with stakeholders.

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