Heathrow, airlines dealt setback as CAA maintains price cap
Pricing profile was based on an expected rebound in Heathrow’s passenger tally: CAA
London: London Heathrow Airport and its biggest airline customers suffered a setback after the UK’s competition regulator largely upheld the pricing set by the Civil Aviation Authority.
The Competition and Markets Authority said it had provisionally decided that the Civil Aviation Authority wasn’t wrong in most of its decisions about fees to be charged at the UK’s biggest airport. The CMA will allow Heathrow, the airlines and the CAA to respond to its findings and a final decision is due October 17, it said.
British Airways, Delta Air Lines and Virgin Atlantic Airways had appealed the five-year charging structure decision by the CAA, saying it underestimated passenger numbers, while Heathrow appealed on the grounds that the fees were too low and would lead to underfunding of crucial investments.
Heathrow is “carefully considering” the CMA’s findings, a spokesperson for the hub said.
A Virgin Atlantic spokesperson said it was “disappointing” that the CMA had largely endorsed the CAA’s decision after three years of consultation. Heathrow has put shareholders first over customers and relied on “pessimistic passenger forecasts to support its agenda,” the spokesperson said.
The average maximum price per passenger that airlines will pay Heathrow is due to fall from 30.19 pounds today to 25.28 pounds in 2026. The regulator said the pricing profile was based on an expected rebound in Heathrow’s passenger tally as the recovery from the Covid crisis continues, as well as the higher charging cap put in place in 2021 to reflect the challenges from the pandemic.