Heathrow to appeal against CAA price cap as airport warns passengers will bear the brunt of ‘underinvestment’
Heathrow Airport has said it will launch an appeal against the Civil Aviation Authority’s (CAA) decision on how much it can charge passengers until December 2026.
The Competition and Markets Authority will review the airport’s grounds for appeal and decide if any can proceed.
Last month the UK Civil Aviation Authority (CAA) confirmed that the cap on how much Heathrow Airport can charge airlines will remain fixed at a level set earlier this year.
A Heathrow spokesman said: “When current shareholders bought Heathrow in 2006, the UK’s hub airport was suffering from years of under-investment as airlines drove down airport charges. Consumers bore the brunt of this through poor service.
“Since then, we have made it our mission to transform Heathrow into one of the best airports in the world, supported by £11bn of private investment.
“We believe the CAA has once again focused on driving down charges to airlines, which will not be passed on to passengers, and is undermining the investment needed to deliver the airport service and resilience consumers want.
“We have formally requested the CMA review parts of the CAA’s decision.”
What is the Heathrow passenger price cap?
The UK Civil Aviation Authority published its final decision for the annual caps that will apply to the charges that Heathrow Airport Limited levies on airlines for using the airport until the end of 2026.
The average maximum price per passenger will then fall by about 20 per cent from £31.57 per passenger in 2023 to £25.43 per passenger in 2024 and will remain at that level until the end of 2026.
This means the average charge over the five years will be £27.49 compared to £28.39 outlined in its earlier proposals.
The price cap has caused huge controversy within the aviation community. Airlines including British Airways and Virgin Atlantic have previously accused Heathrow of “abusing its power,” as it seeks a higher charge.
Virgin have also lodged an appeal with the CMA. A spokesperson told Morning Wire that “the CAA did not go far enough in its final determination, resulting in excessive Heathrow charges that expose a fundamentally broken regulatory framework.”
“The CAA decision contained multiple errors of fact and judgment, including pessimistic passenger forecasts that ignore the strength of recovering demand. We have submitted our appeal so that consumers using the world’s most expensive airport will be protected. We’ll fully support the Competition and Marketing Authority as it considers our case.”
A spokesperson from the International Airlines Group (IAG) said that the “decision was based on inaccurate passenger forecasts and penalises consumers. Heathrow’s charges are still far higher than those of other major airports across Europe, making the UK uncompetitive.”
Andrew Walker, Chief Economist at the UK Civil Aviation Authority, said: “We are confident our final H7 decision on the charges that Heathrow Airport Limited levies on airlines represents a good deal for consumers, while allowing Heathrow to invest in improving services for the future. We will fully cooperate with the Competition and Markets Authority’s review of the matter.”
Press Association with additional reporting from Guy Taylor