Draft Civil Aviation Bill to replace the current economic regulation duties of the aviation regulator.
Passengers’ needs are to be put first under new airports legislation published today by Transport Secretary Justine Greening.
The draft Civil Aviation Bill will replace the current economic regulation duties of the aviation regulator, the Civil Aviation Authority (CAA), with a single primary duty to promote the interests of passengers. The CAA will be given more flexibility to set performance measures at major airports, encourage investment in improvements and provide passengers and other airport users - such as those sending cargo by air - with more information about airline and airport performance.
Transport Secretary Justine Greening said:
The end user - in this case the needs of air passengers and businesses - must be at the heart of our transport networks. Whether going on holiday, flying for business or transporting goods by air, the customer experience at airports can make or break a trip.
By and large passengers give good feedback about airports, but they also say they want things like more seating, better information and additional baggage carousels at busy times - these are exactly the matters that the CAA will be able to address more effectively under its new powers.
This bill couples our commitment to make our airports better rather than bigger with the government’s wider agenda on better regulation. It also complements our ongoing work to produce a sustainable policy framework for aviation, a draft of which will be published next spring.
The draft bill is designed to modernise the key elements of how the industry is regulated and contribute to economic growth. It also extends to aviation security, the ‘user pays’ principle which exists elsewhere in the sector (e.g. safety regulation). This will involve the transfer of certain aviation security functions, such as monitoring and enforcement, from central government to the CAA which charges the industry for its activities. However, the responsibility for setting aviation security policy and making aviation security directions to the industry will remain with the Secretary of State for Transport. It is estimated that this move could save UK taxpayers over £4 million a year whilst seeing a better quality service delivered.
Other measures included in the draft bill today include:
- giving the CAA a role in promoting better public information on customer service and environmental impacts
- a switch to a new licensing regime for larger airports: licensing - which is common in many regulated industries - allows greater flexibility than the current uniform system and enables the CAA to target regulatory activity where and when it is needed to protect the interests of consumers
- new and streamlined appeal processes that will improve access to justice for those affected by regulatory decisions
- a supplementary financing duty on the CAA which will help ensure that efficient airport licence holders can finance their activities
- powers for the CAA to impose a range of penalties for breaching licence conditions (going up to 10% of an airport’s annual turnover) to better incentivise compliance and penalise poor performance
- removing unnecessary central government involvement and bureaucracy from the regulatory process
- modernising the CAA’s governance and operations
The government had originally announced its intention to introduce this bill in the next session of Parliament, however an opportunity has now arisen to introduce it earlier - most likely early next year. By publishing a draft at this stage, the government aims to give the Transport Select Committee and wider stakeholders the opportunity to consider the bill before it is brought before Parliament.
Much of the legislation surrounding aviation dates back to the 1980s and is in need of modernisation. It is possible that the scope of the Bill may be extended before it is introduced. One area which could be included is the reform of the Air Travel Organisers’ Licence (ATOL), following the recently finished consultation on measures to protect consumers better in the 21st century holiday market and help create a more level regulatory playing field for businesses.
Notes to editors
The CAA currently has 4 duties for the purposes of economic regulation, they are:
- to further the reasonable interests of users of airports within the UK, users being defined (in section 82 of the Airports Act) as airlines, passengers and other user of air transport services at the airport
- to promote the efficient, economic and profitable operation of such airports
- to encourage investment in new facilities at airports in time to satisfy anticipated demands by the users of such airports
- to impose the minimum restrictions that are consistent with the performance by the CAA of its functions under those sections
In addition, the CAA also is also required to take account of international obligations
The proposals set out today will replace these with a single primary duty and a limited number of further duties. These are:
- to further the interest of consumers (that is passengers and owners of cargo both present and future), wherever appropriate by promoting competition
- to ensure that licence holders are able to finance the activities which are subject to the relevant licence obligations
- to secure that all reasonable demands for airport services are met
- to promote economy and efficiency on the part of licence holders in its provisions of airport services at regulated airports
- to have regard to guidance issued by the Secretary of State for Transport
- to have regard to any international obligation of the UK
- to have regard to principles of better regulation
The draft Civil Aviation Bill: an effective regulatory framework for UK aviation is available online.
We currently expect this regime will apply initially to Heathrow, Gatwick and Stansted airports.
The CAA will be publishing an example licence relating to economic regulation for stakeholder views today; this licence was commissioned from the CAA by the Transport Secretary to inform Parliamentary debate about the bill. It will not be subject to Parliamentary approval - the example licence can be found on CAA’s website.
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