CAA publishes licences for economic regulation at Gatwick and Heathrow

Date: 13 February 2014

The UK Civil Aviation Authority (CAA) has today published licences for economic regulation at both Gatwick and Heathrow, after previously confirming that both airports will continue to be economically regulated when the new regulatory period begins on 1 April.

Under the Civil Aviation Act 2012, any airport deemed to have substantial market power is required to have a licence, with the airport having to comply with the conditions of that licence by law. On 10 January, the CAA announced its final decision that Gatwick and Heathrow have substantial market power and published proposed licences for both airports. Today the CAA has published the final versions of these licences.

The licences confirm the tailored approaches to economic regulation at the two airports, following extensive consultation with stakeholders. At Heathrow, the CAA has decided average charges to airlines should rise by no more than RPI-1.5% per year up until 2019. At Gatwick, the airport has made a number of commitments to its airline customers, with the licence ensuring the CAA can ensure compliance with these commitments – the CAA will monitor the situation so prices are fair and service standards are high.

As proposed in January, the licences include conditions that require the airports to address issues such as cleanliness, queuing times, seating availability and information provision in the passenger interest. In addition, both airports must develop and update robust contingency plans to ensure they are well prepared for potential disruption and can manage it effectively when it does occur.

Iain Osborne, Group Director for Regulatory Policy at the CAA, said:
“These are the first licences issued under the Civil Aviation Act 2012, which has enabled us to tailor our economic regulation to the specific situation at the different airports.

“They include clear legal obligations for the airports in terms of the prices they charge, and should ensure services and facilities meet the needs of passengers. The licence conditions also mean the airports are more accountable for being better prepared for any future disruption.”

The licences will come into effect on 1 April and the price controls in them will run until 2021 and 2019 for Gatwick and Heathrow respectively (subject to appeal). The licences are available to view here: Gatwick, Heathrow. Further information is available here.

For more information please contact the CAA press office on 020 7453 6030 or press.office@caa.co.uk. Follow the CAA on Twitter @UK_CAA.

Notes to Editors:

1. The CAA’s final decisions for economic regulation at Gatwick, Heathrow and Stansted were announced on 10 January 2014. More information on these decisions is available here.
2. 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.