§ Mr. SheermanTo ask the Secretary of State for the Environment, Transport and the Regions what powers he has to set limits on domestic air fares; and if he will make a statement. [141171]
§ Mr. MullinDomestic air fares in the UK are subject to Council Regulation 2409/92 on fares and rates for air services, which provides for Community air carriers to set fares at the levels they wish and to enter the markets they wish without restriction. The Regulation allows member states to withdraw a basic fare which is considered, in the 797W light of all relevant factors, to be excessively high in relation to the costs of providing the service, and to take action against predatory pricing.
These provisions do not apply to fares established by public service obligation in accordance with Council Regulation 2408/92 on access by Community air carriers to intra-Community air routes. Member states may impose a public service obligation in respect of scheduled air services to an airport serving peripheral or development regions within its territory, or on a thin route to any regional airport, such route being considered vital for the economic development of the region, to the extent necessary to ensure the adequate provision of services satisfying fixed standards of continuity, regularity, capacity and pricing, which standards air carriers would not assume if they were solely considering their commercial interest, and may reimburse carriers for meeting these standards. A public service obligation may therefore include a tariff obligation limiting fare levels or requiring concessionary fares for certain categories of passenger.