Heathrow responds to CAA

Heathrow Airport says the Civil Aviation Authorities decision on the economic regulation of Heathrow, threatens the viability of their investment plan.

The CAA has revised its October decision from a zero allowed growth to one cutting Heathrow Airport charges by RPI -1.5% from 2014-2019. The airport says this will see Heathrow’s per passenger airline charges fall in real terms from £20.71 in 2013/14 to £19.10 in 2018/19.

Heathrow Chief Executive Colin Matthews said: “We are concerned by the degree of change since the CAA’s final proposals just a short while ago. In October the CAA accepted the need for changes to their April proposals, but has now reverted to a draconian position.”

“We want to continue to improve Heathrow for passengers. We will review our investment plan to see whether it is still financeable in light of the CAA’s settlement.”

Heathrow say the CAA’s decision requires them to reduce operational expenditure by more than £600 million, stretch commercial revenue targets by in excess of £100 million, which includes revenues from retail and car park charges, and achieve significant passenger volume growth.

Heathrow had asked for a settlement of RPI +4.6%.

At the same time, the CAA has removed Stansted from price control altogether.

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