Warning Issued to Airports Over Competition Laws

A joint letter was issued this week by the Competition and Markets Authority (CMA) and the Civil Aviation Authority (CAA) to warn airport operators against the sharing of confidential commercial data with their competitors in a potential breach of competition laws.  

In the letter sent out to airport operators by the CMA and CAA, they spelt out the responsibilities and obligations that airport operators are due to face under the competition laws. This details the penalties of chucking these responsibilities or disobeying the competition laws, which could include a fine of up to 10% from their turnover and director disqualification.  

According to the joint letter, the competition watchdog has recently been privy to intelligence that suggests several UK airport operators may not be completely complicit with the competition laws. The CAA has been made aware of this intelligence of late, and both the CAA and CMA share “serious concerns” over the potential breach of competition laws within the aviation sector. The open letter was signed with concern by the CMA senior director, Julliette Enser, and the aviation regulator’s group director, Paul Smith.  

“The CMA and the CAA acknowledge that the coronavirus pandemic and the impact of the conflict in Ukraine (including fuel costs, rerouting and macroeconomic environment) have resulted in extraordinary pressures and uncertainty for the aviation sector,” it says. 

“In difficult times, it may seem tempting to reduce uncertainty by sharing confidential information with competitors. However, sharing and receiving such information may be illegal under competition law. Giving a competitor insight into your future commercial strategy may reduce competition, leading to increased prices and reduced service or choice.  

“This is unfair to customers (both airlines and end consumers), many of whom have also faced and continue to face significant challenges due to the pandemic and other cost pressures.” 

Following this, the letter highlights the requirement by larger airports to consult with all of their customers on any proposed changes to charges before they go into action. According to the Airport Charges Regulations 2011 (ACRs), airports are required to provide transparency on core aspects of exactly how these charges are derived, and they must consult with consumers in a timely manner. 

The letter goes on to say, “While it is appropriate to consult publicly before modifying your airport charges, you must not either share additional information or discuss with other airport operators your pricing or competitive strategies. 

“Even though the ACRs will not apply to many airports in 2023, we consider that it continues to be critical for airports to consult users and abide by the general behavioural principles included in the ACRs, particularly as the aviation industry recovers from the sharp traffic downturn seen during the pandemic.  

“We are aware that many airports will have undergone significant staffing changes as a result of the extremely challenging circumstances of the last few years. With the recovery now well underway, it may be an opportune moment to review your competition compliance policy and ensure that all your current staff have received appropriate training.  

“We should make clear, however, that neither the CMA nor the CAA consider changes in staff or lack of awareness to be mitigating factors for companies that breach competition law.  

“It is your responsibility to ensure that your business complies with competition law. This includes ensuring that your staff know what they can and can’t do, including the types of issues that they should not discuss with competitors.” 

The letter warns airports against breaches of competition laws in future and adds, “If the CMA and the CAA receive further intelligence of suspected competition law breaches in this area, those involved may face formal enforcement action. As you will be aware, there can be serious consequences for businesses that break competition law.” 

The letter is rounded off with an ask to airport operators to follow their responsibilities and respect the aspect of healthy competition, “The aviation industry is hugely important to the UK economy, and healthy competition will ensure that it stays that way. Please take the time to review your practices and ensure that you and your employees are complying with competition law.” 

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