Last week, it was reported Heathrow was keen to significantly increase its fees to recoup losses accrued during, and owing to, the Covid crisis.
The CAA on Tuesday (19 October) confirmed the airport has requested the authority raises the price cap on its per passenger charges from £22 to anywhere between £32 (45%) and £43 (95%).
However, the CAA is proposing a more modest increase on the existing £22 cap to somewhere in the range of £24.50 to £34.40.
"The CAA will work closely with Heathrow, airlines and other stakeholders to narrow this range over the next few months," said the authority.
The cap will come into effect in summer 2022 and will last for five years.
Other proposals laid by the CAA include an interim £30 price cap for 2022 "to protect consumers from any undue increase in airport charges" while the longer-term pricing structure is determined. This will come into effect in January.
It has also intimated there will be no additional adjustment to Heathrow’s regulatory asset base to account for Covid-era losses beyond the £300 million the CAA permitted earlier this year. Heathrow requested a £2.3 billion adjustment last year. In July, it said cumulative losses from Covid-19 had grown to £2.9 billion.
A consultation on the interim price cap will run until 17 November, and another on the wider charge structure until 17 December.
“While international air travel is still recovering, setting a price control for Heathrow airport against the backdrop of so much uncertainty means we have had to adapt our approach," said CAA chief executive Richard Moriarty.
"Our principal objective is to further the interests of consumers while recognising the challenges the industry has faced throughout the Covid-19 pandemic. These initial proposals seek to protect consumers against unfair charges, and will allow Heathrow to continue to appropriately invest in keeping the airport resilient, efficient and one that provides a good experience for passengers."
