The Civil Aviation Authority (CAA) has announced that it will test Manchester Airport to assess its market power through a Market Power Determination (MPD) test.
The review has been requested by a relevant third party, and as the CAA has not previously conducted an MPD test on Manchester Airport, it is legally obliged to conduct the review of the airport’s market power as it is serves over 5 million passengers each year.
The CAA has special powers to conduct a review, identifying whether competition law may not be substantial enough to regulate an airport’s dominance. Should Manchester Airport meet the MPD test’s criteria, it will be subject to paying for a regulation license to operate.
MPDs have previously been carried out on London airports, Heathrow, Gatwick and Stansted, with Heathrow and Gatwick being subject to greater regulation.
The three tests that Manchester Airport will be subject to will examine:
- Whether Manchester Airport has or is likely to acquire substantial power in the airport market
- Whether competition law does not provide adequate protection from the risk Manchester Airport would seek to abuse its market power
- Whether passengers would take greater benefits in further regulating an airport operator versus any adverse effects.
In a press release, the CAA has said:
The Civil Aviation Authority’s preparations are at an early stage and it is currently planning to initiate an MPD for Manchester Airport later in the year. During this period, the Civil Aviation Authority may consult with the airport operator and other relevant parties.
“The Civil Aviation Authority has not reached a view on this matter and no assumption should be made at this point whether the market power test will or will not be met in relation to Manchester Airport.”