1. CAA’s CA98 investigation and sector review in airport “surface access” British Parking Association – Parking Forum Pedro Lino Pinto 2 March 2017

2. About the CAA / Competition
CA98 Investigation
Sector review

3. 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

4. In summary
Consumers

5. 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
Anti-competitive agreements and abuses of dominance prohibited
Sector review
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
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

6. About the CAA / Competition
CA98 Investigation
Sector review

7. Competition Act Investigation
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.

8. About the CAA / Competition
CA98 Investigation
Sector review

9. Background Private action cases
Commitment following submissions by the Independent Airport Parking Association to previous airport regulatory review (Q6)
Consumer and media interest

10. 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

11. 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
Source: CAA Passenger Survey, 2013 (with *), 2014 Note: The chart is representative of journeys by passengers to the airport - not necessarily from the airport

12. 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

13. 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

14. 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
Pre-book
Airports' websites
Consolidators
Partners (Airlines, Travel Agents)
Consolidators' Websites
Airlines

15. 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
Consultation on initial findings (April 2016)
39 respondents (all large UK airports and a wide range of other interested parties)
In December 2016, we published:
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)
of-market-conditions-for-surface-access-to-airports/

16. Better understanding of the sector
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.

17. Advisory Letter
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

18. Thank you Any Questions?