Competition regulators order CAA to review Heathrow price cap

UK competition regulators have ordered the Civil Aviation Authority (CAA) to amend the pricing cap it placed on what Heathrow Airport can charge airlines.

Back in March, the CAA declared that the average charge per passenger that airlines must pay Heathrow should be cut to £25.43 between 2024 and 2026, down from £31.57 this year.

Heathrow Airport Limited and airlines British Airways, Delta Air Lines and Virgin Atlantic had all appealed the CAA's decision. HAL complained that the cut would limit investment, while the airlines said the cuts didn't go far enough – with both parties arguing that the price control limit was not in the interests of consumers.

The Competition and Markets Authority (CMA) determined last month that the CAA made some errors in determining the lower price cap that Heathrow should charge airlines, but said that most of its calculations had been correct.

Now, the CMA has determined that the CAA acted more or less correctly, though there are three aspects of its pricing decision that need reconsideration.

"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," said Kirstin Baker, chair of the group making the decisions on the appeals.

"There are a handful of smaller issues we have ordered the CAA to look at again and it has agreed to do this swiftly."