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Aviation regulator sets interim price cap on Heathrow airline charges

The amount Heathrow is allowed to charge airlines has been set at £31.57 per passenger for 2023.

The aviation regulator announced the interim price cap which is equivalent to £29.68 in 2020 prices.

The Civil Aviation Authority said this was in line with overall proposals on fees issued in June last year.

The CAA said: “This interim price cap replaces the current cap that applies to Heathrow airport’s charges in 2022, which expired on 1 January this year. 

“It is required to protect the interests of consumers in the short term as our final decision and licence modifications for a five-year price control (H7) will not be published until March 2023.”

Developments in the wider economy since the final proposals were issued last summer have given rise to “a degree of volatility in forecasts of inflation and interest rates”. 

Therefore, a final decision on the long-term price cap needed further time and additional analysis in the interests of consumers.

The authority consulted on the stop-gap proposals in December  and “received detailed submissions from Heathrow airport and the airline community, which we have reviewed and carefully considered before making our decision”.

The CAA added: “As with our interim price cap for 2022, once we have set the final price control for the H7 period, any difference between it and this interim price cap for 2023 will be automatically adjusted up or down.”

CAA consumer and markets director Paul Smith said: “We are implementing these licence modifications to protect consumers and to give certainty to the airport and airlines on the level of the price cap for 2023.”

The regulator also said: “Alongside our decision on the implementation and level of the interim holding cap, we also confirm our decision to make a small number of specific changes to HAL’s licence to remove obligations under the service quality framework that we consider are no longer needed.

“These licence modifications will take effect six weeks from today.”

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