A decision on how much Heathrow Airport can charge airlines must be reconsidered, competition regulator the Competition and Markets Authority (CMA) said.
In February, aviation regulator the Civil Aviation Authority (CAA) said the cap on Heathrow’s average charge per passenger must be reduced from £31.57 for 2023 and last year, to £25.43 over the next three years.
But the airport and three airlines – British Airways, Delta Air Lines and Virgin Atlantic – appealed against the CAA’s decision.
Kirstin Baker, who chairs the CMA’s group which assessed the appeals, said: “Having considered these appeals, we found that the CAA’s Heathrow price control struck broadly the right balance between ensuring prices for passengers are not too high and encouraging investors to maintain and improve the airport over time.
“There are a handful of smaller issues we have ordered the CAA to look at again and it has agreed to do this swiftly.”
Charges are paid by airlines but are generally passed on to passengers in air fares.
The CMA said it “broadly found in favour of the CAA” but there are three aspects of its pricing decision that must be reconsidered.
The competition regulator agreed with the airlines that the CAA made errors in one “relatively minor” aspect of its cost of debt calculation and a “small element” within its allowance for exceptional events which might reduce passenger numbers.
Meanwhile, the CMA agreed with Heathrow that the application of an adjustment in relation to the recovery of revenues lost due to the coronavirus pandemic was “inappropriate given the extreme impact” of the virus crisis.
