Scope for future efficiency gains at London airports

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Client Civil Aviation Authority (CAA)
Dates 2014
Service(s)Policy & Economics, Regulation & Competition
As part of the review for the next price control (Q6), CEPA was commissioned by CAA to undertake a study into the scope for future efficiency gains at three London airports (Heathrow, Gatwick and Stansted). The project involved:
  • A literature review of international regulatory precedent and relevant academic papers;
  • Updating productivity analysis previously undertaken by CAA and the Competition Commission (CC);
  • Identifying and calculating additional relevant indicators of efficiency, including TFP, LEMS, RUOE and output measures;
  • Undertaking historic benchmarking against suitable comparators; and
  • Producing estimates of the potential for catch up and frontier shift efficiencies for each of Heathrow, Gatwick and Stansted Airports.
The study culminated in a final report in which CEPA presented the work on the above tasks and set out individual estimated ranges for the scope for efficiency gains at Heathrow, Gatwick and Stansted airports.