The Competition and Markets Authority has published its provisional determinations on appeals by both Heathrow and airlines over the proposed passenger charges paid by airlines for using the airport.
In March the Civil Aviation Authority (CAA) confirmed its final decision on the so-called H7 settlement, stating that average charge per passenger at Heathrow for 2023 would remain fixed at £31.57, before falling to £25.43 in 2024 and remaining “broadly flat at that level” until the end of 2026.
British Airways, Delta and Virgin Atlantic appealed against the decision, claiming that the charges had been based on “pessimistic annual passenger forecasts”, while conversely Heathrow Airport Ltd (HAL) also appealed, stating that the level of charges would not allow it to earn sufficient revenue to support investment.
The CMA has now considered both sides of the argument, and said that errors had been made in the CAA’s calculations, and that it had “provisionally decided to require the CAA to reconsider them”.
But it added that “While it is not possible now to quantify any changes in the price cap that could result from CAA reconsideration of these aspects, we would expect any such changes to have only a small net impact relative to the CAA’s overall price control decision, particularly as they may work in opposite directions”.
The CMA said it would now consider comments from the parties on its provisional determinations, before publishing a final determination by 17 October.
In response a spokesperson for Virgin Atlantic said that “After three years of consultation, it’s disappointing that the CMA has largely endorsed the CAA’s decision, which did not go far enough to protect consumers from excessive charges at Heathrow”.
“The airport has prioritised shareholders over consumers, relying on pessimistic passenger forecasts to support its agenda, in stark contrast to the actual number of passengers flying from Heathrow which is close to pre-pandemic levels.
“Under the incoming CEO, Heathrow must now put customers first, working collaboratively with airlines to get back to its best so it can deliver a world class experience commensurate with being the world’s most expensive airport.”
The CMA’s provisional determinations can be read in full here.