Airports

Ownership

Who owns the airports?

Since the British Airport Authority (BAA) was privatised in 1986, the state does not own any of the international airports in the United Kingdom. Heathrow is now owned and run by Heathrow Airport Holdings Limited (formerly BAA), which is in turn owned by FGP Topco Limited, a consortium led by Ferrovial S.A.. Aberdeen and Glasgow (former state-owned airports) and Southampton are now owned by AGS Airports Limited, which is in turn jointly held by Ferrovial (via Faero UK Holding Limited) and AGS Ventures Airports Limited. Ferrovial did also own Gatwick, Edinburgh and Stansted Airports, but was compelled by the Competition Commission to sell them. Since 2019, Gatwick has been majority-owned by French VINCI Airports, while the remainder is owned by Global Infrastructure Partners. London City Airport is owned by a Canadian consortium made up of AIMCo, OMERS, Ontario Teachers’ Pension Plan and Wren House Infrastructure Management.

There are, however, a number of airports owned by local authorities through public airport companies, and the Scottish government owns a number of the airports in the Highlands and Islands of Scotland. Other major airport owners include the Manchester Airports Holdings Limited, which, in addition to Manchester and Stansted, owns the East Midlands airport, and the Peel Group, which owns Liverpool John Lennon, Doncaster Sheffield airports and a heliport at Manchester City Airport.

Licensing

What system is there for the licensing of airports?

Although no airport is required to be licensed, commercial passenger flights, aircraft engaged in public transport flights or for instruction in flying can generally only take off or land at a licensed airport. The Civil Aviation Authority (CAA) must grant a licence if various specified safety requirements are met. A licence may be granted either for private use or for public use, and in the latter case the airport must be available to all persons on equal terms and conditions at all times when it is available for the take-off or landing of aircraft. 

Economic regulation

Is there a system of economic regulation of airports? How does it function?

The system of economic regulation of airports that had been provided by the Airports Act 1986 was replaced by a new system introduced by the Civil Aviation Act 2012. Under this system, an airport operator that has, or is likely to acquire, substantial market power requires a licence from the CAA where the benefits of this are likely to outweigh the adverse effects from the point of view of users of air transport services and competition law does not provide sufficient protection. Heathrow and Gatwick currently hold licences, which include conditions relating to price controls, service quality and operational resilience. 

On 28 June 2022 the CAA published its Final Proposals for the maximum charges that Heathrow Airport Limited can charge airlines for using the airport for the next five years. Following further consultations, a Final Decision is expected in Autumn 2022.

Although Stansted had previously been regulated, the CAA found that it did not meet the market power test and consequently it has not required a licence since 1 April 2014. A market power determination on Manchester Airport that was postponed as a result of the covid-19 pandemic, is expected to occur later in 2022.

Access

Are there laws or rules restricting or qualifying access to airports?

Under the Airports Act 1986, the Secretary of State for Transport has the following powers to restrict or qualify access to airports:

  • by means of a direction where necessary or expedient in the interests of national security or external relations;
  • through traffic distribution rules between airports serving the same area in the United Kingdom (which must comply with the conditions relating to such rules in Regulation (EC) No. 1008/2008) (as retained in UK law);
  • through the imposition of a limit on the number of movements at an airport; and
  • by means of a scheme prepared by the CAA, at the direction of the Secretary of State, allocating capacity at the airport.
Slot allocation

How are slots allocated at congested airports?

Slot allocation at airports is regulated by EU Regulation No. 95/93, as amended and retained in UK law through the Airports Slot Allocation (Amendment) Regulations 2019. The Airports Slot Allocation Regulations 2006 also apply and, at a practical level, the Worldwide Airport Slot Guidelines are also followed.

Most congested airports are designated as coordinated airports. At a coordinated airport, the allocation of slots is carried out by the United Kingdom’s independent coordinator, Airport Coordination Limited. The bedrock of the slot allocation system is the principle of grandfather rights, whereby an airline that has used a series of slots for at least 80 per cent of the time during a traffic season is entitled to it in the next equivalent season, but if it cannot show at least 80 per cent usage, then the slots must be given up to the slot pool. In response to the covid-19 outbreak and consequent travel restrictions, successive slot waivers have applied, under which temporary alleviation from the 80/20 ‘use it or lose it’ rule has been introduced. There are certain other rules about priority, including that priority in the allocation of 50 per cent of slots from the slot pool must be given to ‘new entrants’ (as defined).

Slots may be transferred by an air carrier between its routes and between carriers in a group, but cannot otherwise generally be transferred. However, they may be exchanged between air carriers. In reliance on this right, the practice of slot trading has developed in the United Kingdom, at any rate at the London airports, whereby valuable slots are exchanged for worthless slots plus money and thus effectively sold. This practice was sanctioned by a judgment of the High Court in 1999 (in R v Airport Coordination Limited ex parte the States of Guernsey Transport Board). In November 2017, the Court of Appeal found that even a financially defunct airline that has ceased operations can be considered an ‘air transport undertaking’ in line with the regulation, and is therefore entitled to obtain and transfer slots (in R (Monarch Airlines Ltd) v Airport Coordination Ltd).

Ground handling

Are there any laws or rules specifically relating to ground handling? What are they?

Access to the ground handling market at UK airports is governed by the Airports (Groundhandling) Regulations 1997 (as amended).

The main effect of the regulations is to:

  • allow access for third-party handlers to the ground handling market at airports with traffic of not less than two million passengers or 50,000 tonnes freight, subject to the ability of member states to impose limits in certain circumstances; and
  • ensure that airlines can self-handle at airports with annual traffic of not less than one million passengers or 25,000 tonnes of freight, subject to the possibility of limiting this in certain circumstances. 
Air traffic control

Who provides air traffic control services? And how are they regulated?

The principal provider of air traffic control services in the United Kingdom is NATS Holdings Limited, a public–private partnership between the state, the Airline Group (a company whose shareholders include the principal UK airlines), NATS staff and UK airport operator LHR Airports Limited. This company is licensed by the CAA under the Transport Act 2000 and providers of air traffic control services at other airports are similarly licensed.