CAA Does Away with Long-Haul Air Fares Regulation
December 4, 2006 // Published as a news service by IHS
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The U.K. Civil Aviation Authority (CAA) decided to end regulation of long-haul air fares, citing increased competition in the airline market.
CAA will remove air fare regulations, which were originally implemented more than 30 years ago, in two stages.
The first will cover long-haul routes other than U.K.-U.S.
Specifically, regulation will first be removed from flexible economy fares to Israel, Russia, Egypt, Ghana, Mauritius, Nigeria, South Africa, Bangladesh, India, Pakistan, Japan, Thailand, Mexico and Brazil.
The second stage, which will cover U.K.-U.S. routes, will be deferred until other pricing restrictions in the U.K.-U.S. market are removed, CAA said.
The CAA decision was spurred by several changes in the long-haul market, including:
- The gradual liberalization of air transport markets, such as U.K.-India.
- Cheaper and more widely available fares for travel via an intermediate stop.
- More intense competition between airlines.
- An increase in the range of fares and products available, now that airlines price more competitively.
- Greater transparency through the Internet, allowing the consumer to make informed choices about air travel by comparing prices and alternatives.
The CAA consulted consumer bodies as well as the aviation industry prior to taking this step. There was a general consensus that the removal of fares regulation was appropriate in the context of today's market, CAA said.
The CAA issued a decision document with more detail, which can be downloaded at www.caa.co.uk/farespolicy. The original consultation document can be downloaded at www.caa.co.uk/docs/589/20060803ConsultationDocument.pdf.
Source: U.K. Civil Aviation Authority (CAA).