CAA could fine airports 10% of turnover for poor performance
24.11.11
The Civil Aviation Authority is to be given new powers to protect passengers, including the ability to fine airports for poor performance. The measures have been put forwarded in the draft Civil Aviation Bill, published today. If the Bill is enacted, a new licensing system will be introduced for larger airports including Heathrow, Gatwick and Stansted, and the CAA will be able to fine them up to 10% of their annual turnover for poor performance.
The Bill, which is intended to improve the passenger’s experience of major airports, adopts a carrot and stick approach. Airports which invest in improving terminals, seating, signs and general cleanliness will be able to raise the landing fees charged to airlines. Those who fail passengers because of cost-cutting and under investment run the risk of fines. Airports will also be forced to publish performance figures showing, for example, how much luggage they lose or how long passengers spend waiting to clear security.
Transport Secretary Justine Greening said: ‘Much of our aviation regulation is governed by 1980s legislation and needs to be updated. This draft Bill offers a package of reforms to make both regulation and the sanctions that support it flexible, proportionate, targeted and effective. It proposes removing unnecessary regulation and unnecessary intervention by central Government. It devolves more responsibility to the independent specialist regulator, the CAA, while ensuring that the CAA is accountable and weighs the costs and benefits of its decisions.’
While responsibility for setting aviation security policy will remain with the Transport Minister, the costs of regulating aviation will be moved from general taxation to the aviation industry, she said, adding: ‘In addition the Bill gives the CAA a role in promoting better public information about airline and airport performance and about the environmental effects of aviation and measures taken to mitigate adverse effects.’
Responding to the publication, Virgin Atlantic said: ‘Reform is long overdue. The current regulatory system has failed passengers. Airport charges have been allowed to increase way above the rate of inflation, hitting passenger pockets and completely ignoring the economic climate. Last winter’s snow showed that the performance of airports had not improved at the same rate. Regulation must produce better outcomes for our passengers and as the Bill enters Parliament, our focus will be on ensuring that the new framework delivers improvements in practice.’
easyJet Chief Executive Carolyn McCall said: ‘easyJet strongly supports these reforms, which put the passenger at the heart of aviation policy and recognises the key role airlines can play to deliver this outcome. Giving the Civil Aviation Authority the ability to draft licences gives them more flexibility about how they set airport charges, and how long for. This change brings the CAA in line with other UK regulators.'
'We are particularly pleased that, following easyJet and other airlines' lobbying a right of appeal has been given to airlines in the process of setting charges at regulated airports. This recognises how our interests are aligned with our passengers, and that we represent their views well. We also welcome the additional powers available to the CAA, which include penalties of up to 10% of an airport turnover. This means that they can discipline market abuse by airports in a more proportionate and effective way.'
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