The regulator has made this decision to address the Competition and Markets Authority’s (CMA) determination on the H7 licence modification appeals from Heathrow Airport Limited and airlines in April 2023.
The CMA found in October 2023 that the UK Civil Aviation Authority had 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. It also determined that there were some smaller issues for the UK Civil Aviation Authority to re-examine.
The announced changes reflect:
- a smaller reduction in charges for the over recovery of revenue by Heathrow in 2020 and 2021;
- elimination of the premium that had been allowed on indexed linked debt in calculating Heathrow’s cost of capital; and
- changes to ensure that Heathrow’s charges reflect the costs of pension deficit repair payments and business rates.
This decision should allow Heathrow to reflect these matters in its 2025 charges consultation due later this Summer and is consistent with the requirements of the CMA’s Final Determination.
