The Civil Aviation Authority is undertaking a consultation with a view to removing the fares regulations that remain for certain scheduled flights from the UK.
On 4 August 2006, the Civil Aviation Authority (CAA) issued a consultation document seeking views on a proposal to remove the limited fares regulation that remains in relation to certain scheduled flights from the UK to points outside the single European aviation market. The regulation would be removed in two stages. The first would be to remove the regulation for all routes non-UK/US routes, the second stage would extend the deregulation to UK/US routes.
The regulation at present affects only a small part of the market, the major routes being from the UK to the US, Nigeria, South Africa, India and Japan where competition is constrained by government-imposed restrictions. The CAA considers that there are certain "captive" passengers on these routes who have no choice but to travel by air, and are forced to pay a premium as the airlines are protected from competition by government restrictions.
There are a number of reasons that the CAA feel that the fares regulations can be removed: Markets constrained by government-imposed restrictions are getting fewer; competition between airlines is increasing; there is an intensification of price competition from airlines offering indirect travel to destinations; a greater proportion of business passengers are now prepared to travel on indirect routes; the internet has allowed customers to efficiently carry out price comparisons and obtain discount fares and, finally; competition law has strengthened in the UK since the CAA last reviewed its policy.
Comments are invited by 31 October 2006.
The paper can be found at: http://www.caa.co.uk/docs/589/20060803ConsultationDocument.pdf