We assess whether airports have substantial market power and, where appropriate, licence those that do. Information
on airports that have planning rights as statutory undertakers and traffic distribution rules for Heathrow and Gatwick
airports.
We have powers under the Civil Aviation Act 2012 for the economic regulation of operators of airports in the UK.
Under the legislation an airport operator that passes the following test requires a licence issued by us.
The test is:
a) The relevant operator has, or is likely to acquire, substantial market power in a
market, either alone or taken with such other persons as we consider appropriate.
b) Competition law does not provide sufficient protection against the risk that the relevant operator may engage in
conduct that amounts to an abuse of that substantial market power.
c) For users of air transport services, the benefits of regulating the relevant operator by means of a licence are
likely to outweigh the adverse effects.
Market power assessments
Starting in May 2011, we undertook market power assessments of Heathrow, Gatwick and Stansted airports. In January
2014, we published our findings that Heathrow and Gatwick met the market power tests and therefore the respective
operators required a licence. We found that Stansted did not meet the tests for services to passenger airlines. In
March 2014, we found that Stansted did not meet the tests for services to cargo airlines at the airport either and,
therefore, does not require licensing.
Airport licences
In February 2014, we granted licences to the operators of Heathrow and Gatwick airports which came into force on 1
April 2014. These licences include conditions relating to prices, service quality and operational resilience, amongst
others.
We have powers under the Civil Aviation Act to impose penalties for breach of a licence condition or breach of an
enforcement order issued in relation to a licence condition. We may also impose penalties for non-compliance with
information notices we have issued and for destroying information or knowingly supplying false information. We are
required to publish a statement of policy on penalties for non-compliance under Chapter 1 of the Civil Aviation Act
setting out the criteria we will use to determine whether a penalty is appropriate and the amount of any penalty.
In May 2015, after consultation, we published Economic Licensing Enforcement Guidance covering our approach to
enforcing the airport economic licences and licences to provide air traffic services under the Transport Act 2000. The
guidance outlines the legal framework in which our work fits and informs stakeholders of the enforcement powers we have
and how we will use them.
After consultation, we also published prioritisation principles that explain our approach in deciding which pieces
of work to take forward in the areas of consumer protection, competition law and economic regulation.
Statutory undertakers
An airport operator whose annual turnover at the airport exceeded £1m in at least two of the last three financial
years may apply for a certificate that confers rights on the operator as a statutory undertaker. Airport operators who
already have a permission to levy airport charges issued under section 39 of the Airports Act 1986 retain their status
as a statutory undertaker.
Traffic distribution rules
Under the Traffic Distribution Rules 1991 whole plane cargo services or general or business aviation cannot be
operated at Heathrow or Gatwick airports during periods of peak congestion declared for each scheduling season, without
permission from the airport operator.