UK Civil Aviation Authority (CAA) agrees that common ownership of London”s main airports is ”likely” to prevent competition but disagreed that regulation is in any way to blame.
Evidence from UK regional airports and from non-regulated airports in the capital show airports can and do compete for airlines and passengers, it said in a statement, and such competition can deliver significant benefits to customers.
But whereas the Competition Commission in its April ”Emerging Thinking” report criticised the regulatory system as a separate feature which could ”prevent, restrict or distort competition” ” and Transport Secretary Ruth Kelly immediately ordered a review of it ” the CAA said that ”it has served to mitigate the adverse effects of market power, including common ownership of BAA”s South East airports.”
CAA group director of economic regulation Dr Harry Bush said: ”In the absence of sufficient competition in London, greater reliance has been placed on regulators to decide upon the airports” pricing and to guide the airports” investments in capacity and service quality.
”Economic regulation has brought benefits. But it is timely to ask the question whether greater competition would better serve consumers.”
But Ryanair hit out at the CAA, describing its support for the break-up of BAA as ”a sick joke on airlines and passengers who have suffered large price increases and abject customer service at the BAA monopoly airports” because of what it called CAA”s ”inadequate and ineffective” regulatory regime.
Ryanair CEO Michael O”Leary said: ”This is too little too late from a regulator which has stood idly by and rubberstamped every unjustified price increase invented by the BAA monopoly in recent years.
”If Harry Bush and his inadequate regulatory team had taken any measures to protect the interests of users in recent years, the BAA airports would not have been able to promise its shareholders a bonus of ”1bn during the Ferrovial takeover.”