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Airports must put passengers first - Hoon

Airports must put passengers first - Hoon

DEPARTMENT FOR TRANSPORT News Release (034) issued by COI News Distribution Service. 9 March 2009

Passengers' needs are to be put first under new measures designed to improve air passenger experience and the economic regulation of airports, unveiled today by Transport Secretary Geoff Hoon.

Under the plans, the aviation regulator, the Civil Aviation Authority (CAA), will be given a new primary duty to promote the interests of passengers. Air passengers will also get a new champion - 'Passenger Focus' - who will represent them as they do for rail and bus users.

The CAA will also be given a new secondary duty to ensure that airports meet their environmental obligations. The CAA will not be asked to develop its own environmental policies but will be tasked with ensuring that the economic regulation of airports is consistent with existing environmental obligations placed on airports.

Transport Secretary Geoff Hoon said:

"I want to put passengers at the heart of how our airports are run - this will help ensure that that we get the most efficient and competitive aviation sector possible.

"The CAA has told us that their current duties lack clarity. They ask them to further the interests of both airlines and passengers, without saying who comes first. Today I am removing that lack of clarity - the passenger must come first.

"Passengers have told us that although they are broadly happy with their experience of airports, they want things like more seating areas, more toilets, better flight information and more baggage carousels open at busy times - these are the exactly the kind of issues that we will expect the CAA to address in discharging its new duty."

The new duties are part of a package which is designed to improve the economic regulation of UK airports. The measures have been developed based on the recommendations of a panel of independent experts, chaired by Professor Martin Cave, who were appointed in June 2008 to review the economic regulation of UK airports.

Other proposed measures announced today include:

* A switch to a new licensing regime for larger airports: licensing - which is common in many regulated industries - allows greater flexibility than the current system and will enable the CAA to target regulatory activity where and when it is needed to protect the interests of consumers. There will be three tiers of licence which place varying levels of control on airports depending on their market power.

* New and streamlined appeal processes that will improve access to justice for those effected by regulatory decisions.

* Measures to improve outcomes for consumers by promoting the financial and operational resilience of airports, including a specific financing duty on CAA, and new licence conditions for larger airports

The measures are subject to a 12 week consultation which concludes on 1st June 2009.

Notes to Editors

1. The CAA currently has four duties for the purposes of economic regulation, they are:

- to further the reasonable interests of users of airports within the UK, users being defined (in section 82 of the Airports Act) as airlines, passengers and other user of air transport services at the airport;

- to promote the efficient, economic and profitable operation of such airports;

- to encourage investment in new facilities at airports in time to satisfy anticipated demands by the users of such airports; and

- to impose the minimum restrictions that are consistent with the performance by the CAA of its functions under those sections.

In addition, the CAA also is also required to take account of international obligations.

2. The proposals set out today will replace these with a single primary duty and a limited number of further duties. These are:

Primary duty

to promote the interests of existing and future consumers of passenger and freight services at UK airports, wherever appropriate by promoting effective competition.

Further duties

- to secure, so far as it is economical to meet them, that all reasonable demands for airport services are met efficiently;

- to ensure that licence holders are able to finance the activities which are subject to the relevant licence obligations;

- to have regard to the effect on the environment and on local communities of activities connected with the provision of airport services;

- to take account of guidance issued by the Secretary of State, and to assist in delivery of airport infrastructure consistent with the National Policy Statement on Airports, unless there are compelling reasons not to do so;

- to have regard to the principles of Better Regulation, any other principles appearing to represent best regulatory practice and to consult with stakeholders, including airlines.

3. The Review of the economic regulation of airports was tasked with looking at how best to provide incentives to:

- improve the passenger experience;

- encourage appropriate and timely investment in additional capacity to help deliver economic growth in line with wider Government policy;

- address the wider environmental impacts of aviation from airport development.

4. The Review has been advised by a panel of independent experts. The members of the advisory panel, who are experts in their fields of economic regulation, business and consumer representation are:

- Professor Martin Cave, Chair, Warwick University

- Chris Bolt, PPP Arbiter and Chairman, Office of Rail Regulation

- Sir Adrian Montague, Chairman of Friends Provident and Non-Executive Chairman of British Energy Group.

- Philip Cullum, Deputy CEO, Consumer Focus

- Dr Anne Graham, University of Westminster

- Professor Dieter Helm, Oxford University (and Chair of DEFRA's Academic Panel, member of the Advisory Panel on Energy and Climate Security)

- Andrew Sentance, Member Monetary Policy Committee.

- David Gray, ex MD Networks Division Ofgem.

5. Further information about the terms of reference for the review, biographical details of panel members, how to respond to the proposed reforms and some clarifying comments on the purpose of the review can be found at: http://www.dft.gov.uk/pgr/aviation/airports/reviewregulatioukairports/

Public Enquiries: 020 7944 8300
Department for Transport Website: http://www.dft.gov.uk

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