Transport and government regulation

Price Caps buses

Train fares especially on season tickets. They can have freezes, but there was a recent increase in bus fare caps from 2→£3

This was done to improve infrastructure investment, sustainability and gov rev.

Stats for Quality standards on trains.

ORR is the rail regulation. 89.1%, which was 0.7% short of target (50k late) and a fall from a year before.

13/18 franchised operators were exceeding targets for cancelations and severe lateness.

Train investments due to quality standards

Network Rail $35bn, given that they had fallen short of 25% of targets

RPI - X in Rail industry

ORR uses this to see how much train operators can charge tickets services. The ORR sets a control period framework which sets effeciency targets which determines how much X is reduced.

Quality control fines

great Western Railway £2.2m due to punctuality

Price caps in trains

regulated rail fares in mainland UK capped at a 4.8% increase from last year

RPI + K Transport encourages investment

£3bn expeniture plan over 4 years e.g. extending runways and terminal facilities. Heathrow

Example of Regulatory capture

737 Boeing was supposed to be regulated by the FAA, red aviation administration. they delegated lots of safety certificatoin to boeing.

There was critical design errors in the flight control system, but the FAA hasnt independently verified its safety.

Technical and safety consultants often overruled by the FAA.

2 crashes and over 300 deaths.

Aircraft Profit controls

In 2020, the CAA set the profit cap for Heathrow Airport at a weighted average cost of capital (WACC) of around 6.2%.

This means that Heathrow is allowed to make a return on its investments up to this rate, preventing it from overcharging airlines or passengers.