To ask the Secretary of State for Transport, what assessment he has made of the potential merits of updating the pricing principles underpinning the economic regulation of Heathrow Airport.
23 July 2021
Economic regulation of Heathrow Airport is carried out by the Civil Aviation Authority (CAA), independently of the Secretary of State for Transport, in accordance with the Civil Aviation Act 2012.
In line with s.19 of that act, the licence granted to Heathrow Airport by the CAA regulates the prices that the Airport may charge to its airline customers. It does this by setting a ‘cap’ on the total revenue the Airport may levy against its customers, expressed on a per passenger basis.
The CAA may include whatever conditions it deems necessary or expedient to guard against the risk of the Airport exploiting its significant market power. My Department has no reason to believe that the price control principles of the Act, and the powers granted to the CAA, are inadequate to enable the CAA to satisfy that aim and carry out its functions in line with its duties (as laid out in s.1 of the Act).