CAA’s CA98 investigation and sector review
in airport “surface access”
British Parking Association – Parking Forum
Pedro Lino Pinto
2 March 2017
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About the CAA / Competition
CA98 Investigation
Sector review
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The Civil Aviation Authority

We are the UK's specialist aviation regulator
 Our regulatory activities range from:
 making sure the aviation industry meets the highest technical and
operational safety standards to preventing holidaymakers from being
stranded abroad/losing money because a tour operator fails
 We are also responsible for the Economic Regulation of Airports and Air
Traffic Control

Civil Aviation Act 2012 (CAA12)
 We must carry out our functions in the regulation of operators of dominant
airports to further the interests of users of air transport services regarding
the range, availability, continuity, cost and quality of airport operation
services
 In the execution of this duty
 We must do so, where appropriate, by promoting competition in the
provision of airport operation services
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In summary
Consumers
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Concurrent Competition Powers



CAA powers over air traffic services (ATS) since 2001 and airport operation services
(AOS) since 2013
Competition and Markets Authority (CMA) has power over all economy (including all
aviation – hence airlines, travel agents etc.)
Competition Act 1998


Sector review

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we must keep under review the provision of AOS and ATS
does not need a specific issue, can be to improve understanding
does not need to lead to a particular course of action or decision
Market study

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Anti-competitive agreements and abuses of dominance prohibited
assess whether a market is improving choice and value for aviation consumers,
may look at how competition might work more effectively
may improve our knowledge, look at developing markets where there may be
potential risks to consumers or barriers to entry
may result in a range of outcomes including an MIR to CMA
Market investigation reference (MIR)


can make MIR to CMA to request in-depth market investigation if we consider a
feature of a market might be having an “adverse effect on competition”
in lieu of making MIR, we can accept binding undertakings from market
participants to address any features harming competition
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About the CAA / Competition
CA98 Investigation
Sector review
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Competition Act Investigation



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Infringement Decision
 Agreement to fix parking prices
 Both parties admitted the offences (leniency)
Parties
 East Midlands International Airport
 Prestige Parking Ltd (Independent Parking Operator)
Decision (December 2016)
Precedent value –
 CAA as competition enforcer
 airports cannot dictate terms to third parties that they allow on to
their facilities.
www.caa.co.uk/Commercial-industry/Airports/Economic-regulation/Competition-policy/Notice-ofinvestigation-under-the-Competition-Act-1998/
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About the CAA / Competition
CA98 Investigation
Sector review
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Background
 Private
action cases
 Commitment
following
submissions by the
Independent Airport
Parking Association to
previous airport
regulatory review (Q6)
 Consumer
and media
interest
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Review of market conditions for surface
access at UK airports

Sector Review – no
information gathering powers –
“market study - light”
 Market
Structure
 Vertical
relationships
– access to facilities
– provision of services
 Transparency
 Information
provided to
passengers
 Distribution and sale to
passengers
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Initial Findings – Market Structure
 Range
of choice
varies by airport
 More restricted if poor
public transport links
 Airports often have
cross cutting
commercial interest
 Planning rules
important for
developing capacity
100%
90%
80%
70%
Other
60%
Tube/DLR
50%
Rail
40%
Bus/Coach
30%
Taxi/Minicab
20%
Car Rental
10%
Car Park
0%
Car - driven away
Source: CAA Passenger Survey, 2013 (with *), 2014
Note: The chart is representative of journeys by passengers to the airport - not necessarily from the airport
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Initial Findings – Market Structure
 Airports:
possible dominance upstream and in some cases…
̵ exclusive arrangements
̵ differential treatment of surface access providers
e.g. airports' own services vs. independent providers.
̵ derivation of charges often not clear
̵ transparency and consultation variable
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Initial Findings – Information
 Passenger
surveys imply
they are broadly aware
 But
do they really know:
inbound? not previously
flown?
 Premium
services are
heavily marketed
 Drop
off fees are the norm
 Best
deals require
research, uninformed will
pay more
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Initial Findings – Distribution
 Large
online distributors are
major players
- they charge a significant
proportion of revenues to list…
…but also have to pay others for
web traffic (airlines, search
engines)
 Often
not allowed to offer
discounts (closed groups)
 Distributors may also
operate parking products
 Some sharing of information
Parking distribution
channels
Turn-up
Airports'
websites
Pre-book
Consolidators
Airlines
Consolidators'
Websites
Partners (Airlines,
Travel Agents)
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In summary

No strong grounds for further action at this stage in terms of formal
market study / yet another CA98 case in this sector.
 But some business practices at UK airports that could have the potential
to restrict competition and consumer choice
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Consultation on initial findings (April 2016)
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39 respondents (all large UK airports and a wide range of other
interested parties)
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In December 2016, we published:
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–
Final Report summarising all responses and our findings
–
Advisory Letter to Airport Operators and other market participants
We have also followed up with industry with some bilaterals and at
events (e.g. Airport Operators Association, British Parking Association)
www.caa.co.uk/Commercial-industry/Airports/Economic-regulation/Competition-policy/Reviewof-market-conditions-for-surface-access-to-airports/
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Better understanding of the sector
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We now better understand what is provided by airport operators,
their commercial interests and the wider context and objectives
underpinning how airport operators develop their surface access
strategies.
We now better understand the risks faced by consumers, which
will better equip us to prioritise possible future competition and
consumer complaints and inform our economic regulatory activity
for the airport operators we regulate.
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Advisory Letter

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Remind airport operators and other industry participants of their
responsibilities under competition and consumer law.
Areas Covered
 Anti-competitive agreements
 Dominance test
 Exclusivity and tendering
 Discrimination
 Consumer Information / Marketing
 Distribution and retail price maintenance
 Services for passengers with reduced mobility
Urging industry to review compliance and remind them that they
can report anti-competitive concerns to us or the CMA
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Thank you
Any Questions?
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