CAA to consult on market power assessment for Stansted Airport following long-term deals between airlines and new owners

Date: 17 September 2013

Following yesterday’s announcement that Ryanair and Manchester Airport Group plc (MAG) have made a long-term agreement to grow passenger traffic through Stansted Airport, the CAA has decided it will defer making final proposals on future regulation for Stansted from 1 April 2014. These were due to be published on 3 October.

Under the Civil Aviation Act 2012 a market power test is required as part of the process to decide whether an airport should be regulated in the future and if so, how. The CAA originally published a consultation on its ‘minded to’ assessment for Stansted’s market power in January 2013, which closed at the end of May. The CAA acknowledged that one uncertainty that could alter its view would be if the change of ownership of Stansted established different behaviours and relationships with the airlines.

Following the Ryanair deal and another agreement between MAG and easyJet announced earlier this year, the CAA will issue a consultation to invite stakeholders to submit representations on how these agreements may affect the market power assessment.

This announcement does not affect the publication of the CAA’s final proposals for future regulation at Gatwick and Heathrow, which will still be published on 3 October 2013.

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For further media information contact the CAA Press Office on: 00 44 (0)207 453 6030. press.office@caa.co.uk

Notes to Editors
1. The CAA is the UK's specialist aviation regulator. Its activities include: making sure that the aviation industry meets the highest technical and operational safety standards; preventing holidaymakers from being stranded abroad or losing money because of tour operator insolvency; planning and regulating all UK airspace; and regulating airports, air traffic services and airlines and providing advice on aviation policy.
2. To inform the way in which the CAA will approach the regulation of Heathrow, Gatwick and Stansted from April 2014, the CAA is undertaking market power assessments of these three airports. The work started in May 2011. The CAA consulted on its 'Minded To' determinations for Stansted airport in January 2013 and is currently considering responses to that consultation.
3. On 16 September Ryanair and Manchester Airport Group plc announced a long-term agreement to grow traffic through Stansted Airport: http://www.stanstedairport.com/about-us/media-centre/press-releases/mag-and-ryanair-sign-ten-year-growth-agreement-at-london-stansted
4. On 13 June 2013, Stansted airport announced a new long-term growth framework deal with easyJet to allow the airline to more than double its passenger numbers at Stansted from a current 2.8 million passengers to six million passengers a year over the next five years. http://www.stanstedairport.com/about-us/media-centre/press-releases/easyjet-sign-long_term-deal-to-double-traffic-at-stansted
5. The Ryanair deal, together with an earlier one between Stansted Airport Ltd. (STAL) and easyJet, means that over 90 per cent of STAL’s business would be covered by long-term agreements that set airport charges. While the announcements on the long term agreements have been made, we have not been advised that contracts have been finalised.
6. On 28 February 2013 Manchester Airports Group plc acquired Stansted airport from Heathrow Airport Holdings Limited (previously BAA).
7. In April 2013, the CAA published its initial proposals on the appropriate economic regulatory framework for Stansted Airport Limited from April 2014, when the present regulatory arrangements end.