The UK Civil Aviation Authority has today published a consultation setting out the changes it proposes to make to the annual charges for airlines using Heathrow Airport.
In March 2023, the regulator said it would cap Heathrow’s landing fees per passenger at £25.43 in 2024, £25.24 in 2025, and £25.28 in 2026.
However, Heathrow hit back at the regulator soon after the changes were announced, saying the fees were too low and would undermine investment in the airport.
The Competition and Markets Authority (CMA) then got involved after Heathrow Airport Limited and airlines appealed to the competition body in April 2023
In October 2023, it ruled that the UK Civil Aviation Authority had struck broadly the right balance between ensuring passenger prices would not rise too fast and encouraging investment in the airport.
However, the CMA did note some smaller issues with the way the UK Civil Aviation Authority had determined pricing and rules.
In the interest of consumers, the CMA has now proposed some changes to Heathrow Airport Limited’s Licence based on several factors.
These included the removal of the premium for index-linked debt in Heathrow Airport Limited’s overall weighted average cost of capital and ensuring the operating company “neither loses nor gains from matters that are beyond its control when it comes to pension deficit repair costs and business rates.”
Today’s announcement marked the beginning of a six-week consultation into the changes, which, if approved, would lead to decreases in Heathrow Airport Limited’s charges of around £1.52 in 2025 and £1.58 in 2026.
The proposed changes would lead to Heathrow Airport Limited’s nominal price per passenger being capped at an estimated £23.72 in 2025 and £23.70 in 2026.