The Civil Aviation Authority has announced it is to end regulation of long-haul air fares after 30 years.
The authority says greater competition in the airline market has led to its decision to deregulate, a process that will take place in two stages.
The first will cover long-haul routes other than UK-USA and will take effect from December 1, 2006.
The second stage, covering UK-USA routes, will be deferred until other pricing restrictions in the UK-USA market are removed.
In a statement released today the CAA said: “In reaching its decision, the CAA has taken account of a number of significant changes to the long-haul market, including:
- The gradual liberalisation of air transport markets, such as UK-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 said it consulted consumer bodies as well as the aviation industry and claimed there was a general consensus that the removal of fares regulation was appropriate.
Harry Bush, Group Director of Economic Regulation, announcing the CAA’s decision, said: “This is a historic step. The CAA has regulated fares for more than 30 years. Airline competition has now reached the point where it is simply no longer appropriate for a regulator to dictate fare levels.”
Further reading: About the CAA’s regulation of air fares – Caa.co.uk