The competition watchdog has released the initial outcome of opposing appeals by both Heathrow and airlines into a Civil Aviation Authority ruling over charges the airport can impose.
The price cap was criticised by both the airport and airlines after being published in a CAA consultation. It covered charges for the price control period ending December 2026.
The Competition and Markets Authority (CMA) has now set a deadline of October 17 to decide whether to allow or dismiss the appeals after finding that the CAA must “reconsider” any errors made.
The CMA said: “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.”
This came in a summary of provisional findings by the CMA after Heathrow and British Airways, Delta Air Lines and Virgin Atlantic appealed a decision from the aviation regulator, which detailed how much the airport operator can charge airlines, per person, for using its services.
Both the airport and and the airlines argued in various parts of their appeals that the CAA decision was not in the interests of consumers.
The CMA provisionally considered that the CAA was not wrong in most of the decisions that were appealed to it having considered the responses from both Heathrow and the airlines.
Where the CMA has provisionally found that the CAA made errors in its decision, the CMA proposes to require the CAA to reconsider them.
Any changes to the price cap that could result from CAA’s reconsideration would be likely only to have a small financial impact relative to the CAA’s price control decision overall.
The CMA is the appeal body for pricing decisions taken by the CAA – meaning those affected, such as airlines and airports, can challenge decisions directly.
Issuing its provisional ruling, the CMA said: “Overall we provisionally consider that the CAA was not wrong in most of the decisions that were appealed to us.
“In nearly all aspects of the CAA’s approach that were challenged, we have provisionally found that the CAA had not been wrong in its approach.
“However, we agreed with the airlines that the CAA made an error in one, relatively minor, aspect of its cost of debt calculation.
“We did not provisionally determine that the CAA was wrong in its overall approach to forecasting passenger numbers, although we agree with the airlines that the CAA was wrong in relation to one small element within its calculation – the ‘Shock Factor’, making an allowance for exceptional events which might reduce passenger numbers.
“Where we have provisionally found that the CAA has made errors, we have provisionally decided to require the CAA to reconsider them.”
CAA chief economist Andrew Walker said: ”We welcome this provisional determination by the Competitions and Markets Authority that has largely proposed to reject most grounds of the appeals against our decision.
“While it has determined there are a small number of issues that we should review again, these are not expected to have a significant impact on the level of Heathrow’s price control. We will now review the findings before responding in due course.
“We remain confident that our decision on the charges that Heathrow Airport Limited levies on airlines represents a good deal for consumers, while allowing the airport to invest in improving services for the future.”
In response, a Virgin Atlantic spokesperson said: “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.”