Research and analysis

RPC opinion: additional administrative Civil Aviation Authority (CAA) consumer powers

Published 12 June 2026

Lead department: Department for Transport

Summary of proposal: to provide the Civil Aviation Authority (CAA) with additional enforcement and information gathering powers against businesses not in compliance with consumer rights law.

Submission type: options assessment – 3 July 2025

Legislation type: primary legislation

RPC reference: RPC-25062-OA(1)

Date of issue: 1 August 2025

RPC opinion

Fit for purpose:

• the assessment outlines the problem under consideration, focused on the lack of power held by the CAA to investigate and punish breaches, resulting in delays to redress and consumer detriment
• the options assessment (OA) uses examples of market failures to support its argument for intervention
• the assessment considers various long-list options, progressing 2 to the shortlist - the assessment should have provided a stronger justification for this shortlist
• the small and micro business assessment provided is sufficient
• the assessment includes a qualitative justification for the preferred way forward
• the assessment could benefit from a more detailed appraisal of the 2 shortlisted options
• the scorecard provides a summary of expected impacts to businesses and passengers, though no quantified figures have been provided
• the department should include more detail in Part B of the scorecard
• the assessment includes a satisfactory monitoring and evaluation plan, which should be improved by setting out an evaluation timeline

RPC summary

Rationale: Green

The assessment outlines the problem under consideration, which is focused on the lack of power held by the CAA to investigate and punish breaches. This is then resulting in delays to redress and consumer detriment. The OA uses examples of market failures to support its argument for intervention.

Identification of options: Green

The assessment considers various long-list options, progressing 2 to the shortlist. The assessment should have provided a stronger justification for this shortlist. The assessment considers alternatives measures to regulation, at the longlist stage. The small and micro business assessment provided is sufficient.

Justification for preferred way forward: Green

The assessment includes a qualitative justification for the preferred way forward. The assessment could benefit from a more detailed appraisal of the 2 shortlisted options, including consideration of the costs and benefits.

Regulatory scorecard: Weak

The scorecard provides a summary of expected impacts to businesses and passengers, though no quantified figures have been provided. The scorecard should have included more monetisation of impacts such as implementation costs. The department should include more detail in Part B of the scorecard.

Monitoring and evaluation: Satisfactory

The assessment includes a satisfactory monitoring and evaluation plan, with an indicative plan to collect data and a set of metrics used to assess the policy. The plan should be improved by setting out an evaluation timeline.

Summary of proposal

The Civil Aviation Authority (CAA) is responsible for enforcing consumer protection laws that apply to aviation, including those relating to flight disruptions and accessibility. Currently, the CAA’s enforcement powers include measures such as business consultations, warning letters, undertakings and court proceedings.

The government considers that there is a need to strengthen the CAA’s enforcement framework, by providing additional administrative powers in order to enhance consumer protection, reduce enforcement timescales, lessen reliance on more burdensome legal routes, and encourage greater compliance and cooperation from industry.

The OA assesses the following options:

• option 1 – do nothing
• option 2 – voluntary industry data sharing
• option 3 – legislate to give the CAA the power to request and public specific information/data from industry
• option 4 – CAA led enforcement techniques
• option 5 – legislate to give the CAA additional power to enforce consumer rights (preferred)

Rationale

Problem under consideration

The department describes the problem under consideration as the lack of power held by the CAA to issue direct penalties when breaches of consumer law occur, unlike other regulators and the comparable EU and US bodies. This therefore leads to timely and costly court procedures which limit the effectiveness of the CAA’s consumer protection efforts. The CAA also lacks data collecting powers which limits its ability to monitor and enforce air passenger rights.

The assessment could have provided some wider context on how the CAA regulates the whole sector, and how its powers and processes compare to other regulators. The rationale has been supported using a wide range of evidence, including a Department for Transport consultation, independent reviews into the role of the CAA and the views of industry lobby groups.

One of these was the ‘Arm’s Length Body Review’ of the CAA, which made as one of its key recommendations that ministerial consideration should be given to provide the CAA with additional powers to regulate more effectively where it considers that an aviation related business has breached consumer rights law. This also included a recommendation that the CAA be given the power to impose direct financial penalties where appropriate.

The department does well to help demonstrate the problem, by using examples from the CAA of circumstances where the lack of powers led to potential consumer harm, alongside providing some figures to give an indication of the scale of the problem.

Argument for intervention

The OA sets out the need for government intervention with the claim that the CAA’s lack of information gathering powers impedes its ability to take swift and efficient action to address business non-compliance. This can lead to consumer harm not being addressed in a timely manner, with passengers not receiving the statutory redress they are entitled to. Therefore, the government believes it should intervene to strengthen the CAA’s enforcement powers to prevent this consumer harm.

The OA supports this argument by giving two examples of market failures, the information failure caused by the lack of information gathering powers held by the CAA and the moral hazard caused by the lack of CAA enforcement powers, removing the incentive for businesses to comply with consumer law.

The department could have considered the negative externalities imposed on passengers as a result of poor service from airlines. The department also could have used evidence or specific examples to help demonstrate the existence of these market failures.

Objectives and theory of change

The OA states that the government’s policy objectives are to reduce consumer detriment, ensure operators meet their consumer obligations, provide a meaningful deterrent and enable prompt regulatory action. The department has linked these overall objectives to a set of success indicators that demonstrate how each objective could be achieved.

The department does well to set out a time frame for delivery. However, this could be improved by explicitly assessing the objectives against each of the SMART criteria. The OA helpfully includes a logic model, setting out the department’s theory of change of how the proposed intervention will achieve the department’s intended outcomes. This would benefit from a more direct link between the outcomes and impacts from the logic model and the department’s original policy objectives.

Identification of options

The assessment considers 4 potential interventions to form its long-list, in addition to a counterfactual ‘do nothing’ option. These include voluntary industry data sharing, giving the CAA powers to request and publish specific information, CAA led enforcement techniques and giving the CAA additional enforcement powers.

These interventions have each been summarised qualitatively and assessed against the policy objectives, with the department using a RAG rating system to demonstrate how they have performed against each objective. The department does not provide any detail of the policy development involved in identifying the longlist, simply presenting the 5 options without any background.

The OA should include some information about this process, which could use techniques such as the Green Book’s Strategic Options Framework Filter (SOFF), which could help the present the long-list in greater detail whilst retaining a clear and concise structure. The assessment should also have described how options satisfy the view from industry that ‘additional powers should be proportionate, balanced, and transparent, with decisions made by qualified individuals, distinct from the enforcement team, and supported by an appropriate appeals process’.

The department has linked its policy objectives to a set of Critical Success Factors (CSFs) to summarise and assess the longlisted options, and to allow for easier comparison. These options have been assessed against these CSFs and the market failures in order to establish which options can address the problem under consideration, with those not suitable being rejected at the longlist stage.

The assessment has discounted 3 of the proposed longlist interventions, with the remaining 2 progressing to the shortlist. These are Option 1, the do-nothing baseline option, and Option 5, giving the CAA additional enforcement powers.

The department should do more to justify why only one potential intervention was advanced to the shortlist, instead of also giving further consideration to Option 3, the alternative regulatory option. This should include setting out why the department does not consider increasing the powers of the CAA to obtain information and data from non-compliant businesses to have any potential effect on improving consumer protection or deterring non-compliance.

Consideration of alternative options to regulation

The OA considers 2 alternative options to regulation in its shortlist, voluntary industry data sharing and CAA led alternative enforcement techniques. These options are both separate approaches within the existing regulatory framework to address key problems under consideration: the lack of information held by the CAA and the lack of enforcement ability.

The department should have considered combining these 2 options to develop a potential non-regulatory approach that addresses both of these key issues. The assessment provides a sufficient justification for discounting these options between the longlist and the shortlist and therefore deciding to pursue regulatory change, arguing it would not provide the necessary incentives to change firms’ behaviour. This is supported by the use of CSFs, with the assessment demonstrating that non-regulatory intervention fails to meet the policy objectives.

The assessment could be improved by providing greater depth on how the impact of using this non regulatory intervention could vary relative to the preferred option.

Small and Micro Business Assessment (SaMBA)

The assessment includes an adequate SaMBA. The OA uses ONS data to estimate that 97% of businesses within the aviation industry are small or micro, with further 2% medium sized. Despite this, the department expects that the majority of travel bookings are with a small number of larger firms, and so they will face most of the impact. The OA demonstrates this by using CAA undertakings data, which shows that 76% of enforcement action involved large businesses.

The department has decided against exempting small and micro businesses on the grounds that doing so would fail to improve consumer protection. The department also argues that small and micro businesses could benefit from the policy as a result of a decline in anti competitive practices. This justification is sufficient.

Some detail has been provided on potential mitigations for businesses, as the CAA takes a ‘proportionate approach’ which starts with actions that will be least burdensome to businesses. The assessment could be improved by discussing potential mitigations targeted towards small and micro businesses specifically.

This assessment also includes a brief summary on the potential impact on medium sized businesses, including the same rationale for not providing an exemption as was used for small and micro businesses.

Justification for preferred way forward

Appraisal of the shortlisted options

The OA includes an assessment of the 2 shortlisted options, setting out how each performs against the policy objectives, CSFs and ability to solve the aforementioned market failures, in order to determine the preferred way forward. The department selects Option 5 as its preferred way forward, and uses a logic model to help further illustrate how it meets a set of intended outcomes.

The assessment discusses how Option 5 is expected to achieve the policy objectives more effectively than Option 1. This is due to the Option 5 allowing the CAA greater ability to identify and address non-compliance from aviation businesses, creating a stronger deterrent against non-compliance, resulting in a reduction in consumer detriment.

The OA also argues that Option 5 goes furthest in addressing the market failures associated with non-compliance, as data gathering powers could address the CAA’s information failure, and the power to impose civil sanctions removes the risk of a moral hazard, as businesses are held accountable for breaches.

As a result of this appraisal, Option 5 performs better than Option 1 across the criteria, and so is the department’s preferred option. The OA would be improved by expanding the qualitative discussion justifying the department’s conclusion that Option 2 is preferred to Option 1, instead of relying on the assessment against the CSFs and policy objectives which only considers the options in isolation.

The level of analysis conducted by the Department for Transport is sufficient at this stage. However, the appraisal of the 2 shortlisted options should be significantly expanded and should include a greater justification for why the 2 shortlisted options were not subject to a cost benefit analysis, as is expected by the HM Treasury’s Green Book.

The assessment should have included a consideration of the non-monetised impacts of each of the options to show why one is preferred to the other, as the department has produced a set of costs and benefits for Option 5 relative to Option 1, but not used it as part of its justification as the preferred option. This would allow for a more straightforward comparison between the 2 options.

Selection of the preferred option

Overall, the assessment of the options against the policy objectives is a reasonable level of analysis that helps justify the department’s decision to prefer Option 5 to Option 1. The OA should however provide more detail on why their preferred approach has been chosen, with more discussion of how each option performs relative to the other and the inclusion of the costs and benefits featured later in the assessment.

Regulatory scorecard

Part A

The department uses the scorecard to set out how it considers the policy to have a positive impact on total welfare, driven by a positive impact on passengers. This is caused by an increase to the ease and efficiency with which the CAA can enforce breaches, resulting in quicker redress for passengers and a reduction in consumer detriment. The scorecard would be improved by providing an indication of the scale of improvement for passengers, such as the possible reduction in redress time or reduction in business non-compliance.

The assessment also includes a summary of the possible business impact, with aviation businesses expected to face some implementation costs. The department does not expect compliant businesses to face any familiarisation costs. However, it should consider the possibility that changes to the CAA’s enforcement and data gathering powers will lead to all businesses in scope familiarising themselves with these changes.

The department suggests that the overall impact on compliant businesses is negligible. However, the assessment could be improved by illustrating this with a monetisation of the costs they may face.

The department expects a positive distribution impact, with a reduction in consumer rights breaches likely to benefit passengers with protected characteristics. The department could provide an indication of the current number of disputes based on breaches to rights of ‘disabled persons and persons with reduced mobility’ to help illustrate this point.

Part B

The OA does not consider any potential impacts to the business environment as part of Part B of the scorecard. Given the department claims in multiple other parts of the assessment that the proposed intervention will have a positive impact on competitiveness within the sector, these competition impacts should have been discussed here. Increasing compliance may also increase business confidence as they can be reassured that rival firms are less likely to be non-compliant with consumer rights regulations.

The department also does not include any international considerations in the scorecard. The OA claims that the measures will not have an impact on natural capital or decarbonisation. However, the department could consider that increasing the attractiveness of aviation as a means of travel for consumers may result in a small increase in carbon emissions from a greater number of flights.

Monitoring and evaluation

The assessment includes a satisfactory plan for monitoring and evaluation, providing a commitment to informally conduct informally an evaluation of the policy in the future. The department does suggest it could undertake some primary research such as stakeholder surveys, focus groups and engagement with key parties, but provides no timescale for this.

The department is not currently intending to conduct a post-implementation review in line with the expectations of the Better Regulation Framework. The department has usefully included a set of possible evaluation questions, alongside data sources that could be used to support this evaluation.

The monitoring and evaluation plan would benefit from the inclusion of some indicative timelines for when the department intends to conduct its evaluation. The plan also does well to consider possible unintended consequences and the effect of external factors.