Heathrow Airport must reduce passenger charges rules UK CMA

Credit: Heathrow.

The UK’s Competition and Markets Authority (CMA) has issued a verdict largely supporting the Civil Aviation Authority’s (CAA) pricing decision concerning Heathrow Airport. The CAA had previously mandated that Heathrow reduce average passenger charges from the current £31.57 per passenger to £25.43 by 2024, maintaining this sort of price until the end of 2026.

Heathrow Airport had sought to increase these charges to £40 per passenger, while British Airways, Delta Air Lines, and Virgin Atlantic Airways lobbied for charges below £20 per passenger.

In its announcement last month, the CMA endorsed the CAA’s pricing strategy but highlighted the need for further consideration of minor pricing-related issues. The CMA’s final verdict was officially confirmed on Tuesday, October 17 2023.

Kirstin Baker, Chair of the group making the decisions on 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.”

Both Heathrow Airport and the concerned airlines expressed disappointment with the CMA’s final decision on their appeals and called for a revision of the regulatory framework governing airport charges.

A Heathrow spokesperson described the outcome as “disappointing”, but said that they would strive to deliver for their customers. They did say that the CAA must take more consideration of the views of customers so that the airport can enhance the experience for passengers and not just enable higher profits for airlines. 

Airlines have spoken out regarding the decision saying that Heathrow Airport’s charges still remain one of the highest in the world making is noncompetitive. It has also been said that this issue has exposed inadequacies in the regulatory framework, including the formula used to set fees at the airport.