UK competition watchdog upholds cut to Heathrow’s landing fees

The UK competition watchdog has provisionally upheld a ruling to force Heathrow to cut its landing fees in a long-running dispute between airlines and the owner of the country’s biggest airport. The Civil Aviation Authority, the industry regulator, in March ordered the airport to the west of London to reduce its charges to airlines by almost a fifth from GBP31.57 per passenger to GBP25.43 from next year. But both sides lodged appeals with the Competition and Markets Authority against the decision with Heathrow arguing it should be allowed to increase its fees, or risk investment at the airport, and airlines wanting a further cut. In its provisional ruling on Friday, the competition watchdog found “the CAA was not wrong in most of [its] decisions”. Heathrow and some of its biggest airline customers, including British Airways and Virgin Atlantic, have been at loggerheads over whether the airport should be allowed to increase its fees following the pandemic, which hit the aviation industry hard. The charges are typically passed straight on to passengers through ticket prices. In its findings, the CMA noted that the CAA was “wrong in relation to one small element” of the calculation it made for an allowance for exceptional events that might reduce passenger numbers. The competition watchdog also found that one policy from the aviation authority had been applied “in a purely mechanistic way [that] was inappropriate given the extreme impact of the Covid-19 pandemic on passenger numbers”. But it added that any “reconsideration of these aspects” by the CAA were expected to have “only a small net impact” on the level of the charges.<br/>