The UK Civil Aviation Authority (CAA) has issued its decision to set an interim price cap on what Heathrow Airport can charge its airline customers for 2023.
The decision was taken in light of the economic crisis which, which has made it difficult to forecast inflation and interest rates. As a result, the CAA said it was in the interests of consumers, to take further time and conduct additional analysis before reaching a final decision on a five-year price control (H7) which is now due to be announced in March 2023.
We are implementing these licence modifications to protect consumers and to give certainty to the airport and airlines on the level of the price cap for 2023.Paul Smith, CAA Consumer and Markets Director
“We consulted on these proposals in December 2022 and received detailed submissions from Heathrow Airport and the airline community, which we have reviewed and carefully considered before making our decision”, the aviation authority explained.
The decision, announced on 31 January, sets the interim price cap at £31.57 per passenger (in nominal prices). “This value is in line with our H7 Final Proposals (FPs) issued in June 2022”, CAA clarified. This interim price cap replaces the current cap that applies to Heathrow Airport’s charges in 2022, which expired on 1 January this year.
Similarly with the interim price cap set at the beginning of 2022, once a final price control for the five-year period is set, any difference between it and this interim price cap for 2023 will be automatically adjusted up or down.
Alongside the implementation and level of the interim holding cap, the CAA also confirmed a decision to make a small number of specific changes to Heathrow Airport’s licence to remove obligations under the service quality framework that the authority considers are no longer needed. These licence modifications will take effect in the second week of February.