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REGULATION OF AIRPORTS |
The Airports (Economic Regulation) Act 2002 establishes the framework for the economic regualtion of Jamaica's major airports. The Act gives the Civil Aviation Authority (CAA) the legal authority to regulate the scheduled airports (presently Sangster International and Norman Manley International).
The CAA has the authority to:
- Regulate airport charges
- Deal with public interest issues including anti-competitive behaviour
- Ensure accounting transparency.
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Airports operators must submit to the Civil Aviation Authority an application for permission to levy charges. |
The Airports (Economic Regulation) (Charges and Fees) Notice, 2003 details the requirements of the application. The application is to be submitted to the Director of Economic Regulations at the Civil Aviation Authority along with the prescribed fees. |
The Civil Aviation Authority when it grants permission to levy charges, gives effect to its decision by attaching mandatory and discretionary conditions to the Permission. |
Permission holders must provide the CAA routinely with the annual accounts, their schedule of airport charges and changes to the information in the original application. |
Once permission has been granted the holder must pay charges to meet the cost of airport regulation. These charges will be reviewed annually in consultation with Permission Holders. |
The CAA mandate is to:
- Promote the efficient, economic and profitable operation of the airports
- Create an enabling environment for potential investors in airports
- Encourage investment in new facilities in time to meet user demand
- Ensure that airports are operated at standards in accordance with best industry practice and international requirements
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Regulation of Airport Charges |
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The CAA is responsible for setting maximum airport charges using a regulatory formula.
These charges are levied on aircraft operators for the landing, parking and taking off of aircraft. Charges are levied on passengers about their arrival or departure from the airport by air. |
The regulatory formulae specify maximum charges in US Dollars for landing fees, aircraft parking charges, passenger service charges, landing bridge charges and security charges individually. Annual increases are linked to the increase in the United States Consumer Price Index. The formula will be reset at five-year intervals.
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When conducting the five-yearly review, the CAA will be guided by developing knowlege and experience of utility regulation knowledge worldwide. In particular its underlying view is that airport users will be best served by a system of economic regulation that encourages and enables airports to deliver quality service as efficiently as possible and at reasonable prices.
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Regulation of Airports' Conduct |
The second main area
of regulation concerns the airport operators' conduct in respect of what the Act defines as "relevant activities". These comprise:
- Landing, parking or taking off of aircraft
- Servicing of aircraft, including the supply of fuel
- Handling of passengers' baggage and handling of cargo at the airport.
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Certain activities, namely motor vehicle parking, refreshment of passengers and the supply of consumer goods or services, are specifically excluded from the definition. |
Section 14 of the Act requires the CAA to investigate and if necessary impose "discretionary" conditions to the Permission to correct certain conduct by the airport operator. These 'conduct' may be summarized as the adoption od any trade practice, pricing policy or the granting of rights which:
- Unreasonably discriminates against any class of users of the airport or any particular user, or
- Unfairly exploits its bargaining position relative to users, or
- Levies charges, which are both unduly low and cause damage, or are designed to damage, another airport.
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