CAA outlines regulation framework review of Heathrow expansion

The Civil Aviation Authority (CAA) today outlined the scope of a review into the regulatory framework for capacity expansion at Heathrow.

 

It will explore how best to ensure the “efficient and timely delivery” of expansion plans while protecting the interests of consumers.

 

The regulator has set out how it will assess the current regulatory model; consider “credible alternatives and different regulatory models” used for other UK and international infrastructure projects; as well as evaluating the “technical feasibility and robustness of plans” for capacity expansion.

 

The regulator then plans to publish a working paper for consultation in the autumn, outlining potential regulatory models and evaluation criteria. 

 

The review will align with the government’s timetable for updating the Airports National Policy Statement.

 

The CAA sent a letter to industry in March, which set out its intention to review the framework for economic regulation for capacity expansion at Heathrow, alongside its work on a review of price controls.

 

The authority’s consumers and markets director Selina Chadha said: "Expanding capacity at Heathrow airport would be one of the largest capital expenditure programmes in the UK. 

 

“We are committed to reviewing the regulatory framework now so that it best supports the efficient delivery of sustainable expansion and delivers value for consumers.

 

"It is right that we review our framework to help us determine the most effective regulatory approach to support this major national infrastructure project.”

 

A Heathrow spokesperson said: "The CAA’s review is an important opportunity to agree on a fair system that gives long-term certainty.

 

"It needs to progress at pace if the third runway that the government wants at Heathrow is to be delivered on time.

 

"With such a big project, we need a stable regulatory set-up that attracts private investment to deliver the upgraded vital infrastructure that will help grow the UK economy and create the hub capacity that passengers and exporters need."

 

A spokesperson for the cross-industry Heathrow Reimagined campaign said: “We welcome the CAA’s statement on the scope and process to review the regulatory approach at Heathrow. 

 

“This is the first step to ensure that the UK’s only hub airport is competitive, affordable and provides value for money.

 

“Heathrow remains the world’s most expensive airport yet its service and resilience falls far short of what customers deserve. 

 

“The existing regulatory model is fundamentally flawed, incentivising higher passenger charges that harm consumers, businesses and the UK economy.

 

“We want to see growth at Heathrow but this cannot come at any cost. 

 

“We back the CAA’s commitment to urgently review the current model and to evaluate an alternative regulatory approach that could introduce greater competition and capital efficiency in time for the third runway and capacity expansion. 

 

“We encourage the CAA to ensure the review is as comprehensive as possible in the interests of consumers and UK growth.”

 

The government has given backing for a third runway at Heathrow. The airport has pledged to submit a proposal to ministers this summer for a new runway to be operational by 2035.