UK Civil Aviation Authority consults on Heathrow Airport charges - CILT(UK)
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UK Civil Aviation Authority consults on Heathrow Airport charges

20 October 2021/Categories: CILT, Industry News, Aviation, Transport Planning


The UK Civil Aviation Authority (CAA) has published a consultation on its initial proposals for the next price control at Heathrow Airport Limited.

 

This will ultimately set the maximum charges the airport operator can charge its airline customers for using the airport for the next five years.

 

The CAA recognises that there is still significant uncertainty in the shape of the aviation industry's recovery from the COVID-19 pandemic. 

 

These proposals will deliver affordable charges for consumers and allow the airport to continue to invest in service quality, while also supporting consumer demand as the industry recovers.

 

The package of measures set out in the consultation include:

  • A five-year control period, which will allow the airport to smooth charges for consumers and provide investors with medium-term certainty. The control period will come into force in summer 2022.
  • A potential range of airport charges per passenger from £24.50 to £34.40, an increase from £22 per passenger in 2020. The CAA will work closely with Heathrow, airlines and other stakeholders to narrow this range over the next few months.
  • No additional adjustment to Heathrow's regulatory asset base to account for losses caused by the pandemic on top of the £300 million the CAA allowed earlier this year in response to HAL's request for an adjustment of £2.3bn last year.
  • The introduction of a new traffic risk sharing mechanism to prevent either the airport or consumers bearing all the risk of the uncertainty as a result of the industry's ongoing recovery.
  • The introduction of an interim price cap for 2022 to protect consumers from any undue increase in airport charges while the full proposals for the H7 period are finalised.

Richard Moriarty, Chief Executive at the UK Civil Aviation Authority, said: “While international air travel is still recovering, setting a price control for Heathrow Airport against the backdrop of so much uncertainty means we have had to adapt our approach. 

 

“Our principal objective is to further the interests of consumers while recognising the challenges the industry has faced throughout the Covid-19 pandemic. 

 

“These initial proposals seek to protect consumers against unfair charges, and will allow Heathrow to continue to appropriately invest in keeping the airport resilient, efficient and one that provides a good experience for passengers.”

 

Heathrow Airport Limited had requested the CAA increase the cap on its charges per passenger to between £32 and £43.

 

The consultations on the interim price cap and the wider initial proposals will run until 17 November and  17 December 2021 respectively.

 

The CAA has published an explanatory note on its website, which sets out the package of measures in more detail.

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