ABSTRACT
In the last year or so, airport competition matters have risen to the fore in the UK and there have been stirrings of interest in Continental Europe. Interest in the issue in the UK was driven by two specific factors. First, a feeling that, in relation to airports in general (and one or two airports in particular), the competitive landscape might have changed to an extent that less regulation was called for; second, the adoption of a separate regulatory asset base for BAA’s three London airports following the 2003 Price Determination, made it easier to view each BAA airport as a separate entity and thus, in turn, made it easier to question whether all three airports should be controlled by the same company. The outcome was also twofold. On the one hand, the Department for Transport decided to revise its criteria for determining which airports should be designated and thus subject to price caps, (and to request advice from the CAA on whether Manchester and Stansted airports should continue to be designated) and, on the other hand, the Competition Commission launched a market reference inquiry into BAA. A crucial element in both instances was the nature and extent of market power in the airport industry.
