UK Watchdog Backs Heathrow Airport Fee Decision

Britain’s aviation industry is in the midst of an intense battle as to whether Heathrow Airport’s fees will be raised or lowered. On Friday, the Competition and Markets Authority (CMA) gave its provisional backing for most of the Civil Aviation Authority (CAA) aviation regulator’s decisions to set fees for 2024-2026 period.

Heathrow Airport has argued that higher fees are necessary in order to provide a good service, pay shareholder returns and fund investment. This position has been opposed by British Airways owner IAG (ICAG. L) and Virgin Atlantic, claiming the current fees are already too high, and the proposed reduction does not do enough.

IAG Chief Executive Luis Gallego said that the company would be “disappointed if this was the final outcome of the CMA appeal.” He added that they would “participate in the remainder of the appeal process” in order to make their point.

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A Heathrow spokesperson commented on the CMA’s findings, stating: “We are carefully considering the CMA’s initial findings to understand what impact they may have on passengers and our ability to deliver our investment plans.”

The CMA suggested that the CAA should reconsider elements of the charge that had been calculated incorrectly, although it stated that this is unlikely to result in big changes to the proposed level. The CAA responded that it remains “confident that our decision on the charges that Heathrow Airport Limited levies on airlines represents a good deal for consumers while allowing the airport to invest in improving services for the future.”

The CMA has until October 17 to make a decision if it wishes to allow or dismiss the appeals. It remains to be seen how this battle will end, however, Heathrow, IAG and Virgin Atlantic all being determined to come out on top.

Source: Reuters