New Heathrow charges provisionally backed by UK competition regulator

"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," a Heathrow spokesperson said. Virgin Atlantic called the CMA's statement "disappointing".

Britain's competition regulator on Friday provisionally backed most of the CAA aviation regulator's decisions over how much Heathrow can charge airlines over the 2024-2026 period, after appeals by both the airport and carriers. The Competitions and Markets Authority (CMA) stepped in to review the CAA's decision after the cut to charges it proposed for the next three years angered both sides.

Heathrow said lower fees would hit investment, while the airlines, British Airways and Virgin Atlantic, said the cuts did not go far enough. The airport operator argues it needs higher fees to provide a good service, pay shareholder returns and fund investment. The airlines questioned the CAA's calculations saying they were based on overly pessimistic passenger forecasts.

The CMA now has until Oct. 17 to decide whether to allow or dismiss the appeals it said in a statement, adding it would now consider comments on the provisional findings. "Overall we provisionally consider that the CAA was not wrong in most of the decisions that were appealed to us," it said.

In March, Heathrow was told by the CAA that fees would need to fall to about 25.43 pounds ($31.75) per passenger in nominal terms over that period, compared to the charge of 31.57 pounds per passenger for this year. "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," a Heathrow spokesperson said.

Virgin Atlantic called the CMA's statement "disappointing". Where the CAA has made errors in its calculation of the charge, such as in the cost of debt calculation and the mechanistic way one adjustment would be made, the CMA said it wanted the regulator to reconsider them.

But those reconsiderations were not likely to result in big changes to the current proposed level, the CMA said. "We would expect any such changes to have only a small net impact relative to the CAA's overall price control decision, particularly as they may work in opposite directions." ($1 = 0.8010 pounds)