The Competition and Markets Authority (CMA) has supported a ruling from the Civil Aviation Authority (CAA) that will force Heathrow Airport to cut passenger charges from £31.57 (US$38.32) to £25.43 (US$30.87) per passenger by 2024.
While the regulator has broadly found in favor of the CAA’s ruling, there are three aspects of its pricing decision that were remitted to the CAA for reconsideration. In making its final determination, the CMA will issue an order requiring the CAA to ensure that these are considered promptly.
The ruling has brought about vocal opposition from the airport, which believes that this will limit its ability to reinvest in infrastructure projects, while airlines argue that the reduction in fees do not go far enough. Despite the bumper summer enjoyed by the travel industry – particularly low-cost carriers – and global airline capacity finally returning to pre-pandemic parity, profitability among carriers remains at 40% of 2019 levels.
Kirstin Baker, chair of the CMA group making the decisions on the appeals, said, “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. There are a handful of smaller issues we have ordered the CAA to look at again and it has agreed to do this swiftly.”
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