UK CAA says Stansted should not be fully de-regulated

LONDON Thu Dec 20, 2012 5:05am EST

A sign is seen outside Stansted Airport in Essex, southern England March 19, 2009. REUTERS/Stephen Hird

A sign is seen outside Stansted Airport in Essex, southern England March 19, 2009.

Credit: Reuters/Stephen Hird

LONDON (Reuters) - Britain's aviation regulator said on Thursday it was minded to rule that Stansted should not be fully de-regulated because the airport has a level of market power among low cost and charter carriers that may be substantial.

The Civil Aviation Authority CAA.L said that market power was likely to become substantial between 2014 and 2019 as airport capacity constraints continue to tighten in the London region.

"Our core focus is protecting consumers and improving their experience," Iain Osborne, CAA Director of Regulatory Policy, said.

"The evidence tends to suggest we cannot be confident competition alone will deliver this. However, this does not mean we would necessarily continue with traditional price controls - we would consult on that next year."

The CAA has provisionally concluded that it would be better to remedy possible abuse of Stansted's market power both with economic regulation and general competition law.

The CAA said its assessment had come about because of new powers which enable it to be far more flexible. Instead of imposing price controls it can now grant airports economic licences with varying conditions to ensure consumers are protected. (Reporting by Kate Holton; editing by James Davey)