Aviation regulator to review Heathrow’s financial model ahead of third runway

Thursday 27 March 2025 7:35 am

The UK aviation watchdog is to evaluate Heathrow Airport’s monetary mannequin after stakeholders raised considerations over the way it intends to fund a 3rd runway.

A few of Heathrow’s largest airways submitted a request to the Civil Aviation Authority (CAA) in February demanding “an pressing and elementary evaluate” into the way in which the airport is regulated amid hovering passenger prices and sub-par service.

In an open letter to stakeholders on Thursday, the CAA mentioned it meant to answer these requests to “assist capability growth and shield the pursuits of customers.”

The evaluate will discover choices to make sure Heathrow’s regulatory mannequin, which has been described as monopolistic, gives “robust incentives for the environment friendly supply of the substantial prices concerned in growth.”

It should additionally “contemplate the potential affect on the regulated asset base and airport prices,” which have sparked criticism from airways for being a few of the costliest on the planet.

“We’ll seek the advice of broadly on these points and the place it’s applicable will work collectively withthe Division for Transport on these issues,” the letter reads.

Heathrow’s long-delayed, extremely controversial third runway will likely be financed totally by the non-public sector ought to it obtain planning approval.

The boss of Emirates, Sir Tim Clark, warned in February that any additional hikes to touchdown prices to pay for development would elevate the potential for authorized challenges.

Heathrow has repeatedly clashed with its airways over the extent it units touchdown prices, with the dispute beforehand going all the way in which to the Competitors and Markets Authority (CMA).

Airways say they’re being pressured to shell out £1.1bn extra per 12 months on touchdown prices than rival European hubs.

Because the third runway returned to the agenda, lodge operators, enterprise journey teams, and the aviation trade’s international commerce physique, the Worldwide Air Transport Affiliation (IATA), have joined requires a re-assessment of Heathrow’s regulatory mannequin.