CAA likely to prevent Heathrow increasing its…

CAA likely to prevent Heathrow increasing its airport charges to cover Covid losses of £1.7bn
2020-10-10 10:57:00
Heathrow wanted to increase charges to compensate for the economic fallout of the coronavirus pandemic. But its regulators, the CAA, have rejected its request to increase airport charges by £1.7bn to Covid losses. The CAA said Heathrow’s demands were not “proportionate”. Heathrow operates under a regulatory mechanism that allows it to increase airport charges based on the costs it incurs, but this has to be agreed by the CAA.  Separately, Heathrow is waiting on a final decision from the CAA on whether it can recharge airlines £500m for costs it has built up, prematurely, in (unwise)preparation for the building of a 3rd runway – even before all legal and planning hurdles were overcome. Heathrow said revenue losses in 2020 and 2021 would be more than £2.2bn – ie. the £1.7billion + the £500 million.  The CAA now has a consultation (ends 5th Nov) on Heathrow’s request for RAB adjustment.  IAG, said “Heathrow is a wealthy, privately owned company which should seek funds from its shareholders as many other businesses in our industry have done to weather this pandemic. We look forward to participating in the CAA’s consultation process.” .Tweet   Heathrow loses bid to jack up airport charges by £1.7bn The airport wanted to increase charges to compensate for the economic fallout of the coronavirus pandemic By Oliver Gill (Telegraph) 9 October 2020 CAA consultation https://publicapps.caa.co.uk/modalapplication.aspx?appid=11&mode=detail&id=9795 Aviation regulators have dealt Heathrow a blow by rejecting a request to increase airport charges by £1.7bn to cover coronavirus losses. The Civil Aviation Authority said the demands by Europe’s busiest airport were not “proportionate”. British Airways owner IAG welcomed the announcement and said it was “staggering” that Heathrow was seeking to recoup losses. Heathrow operates under a regulatory mechanism that allows it to increase airport charges based on the costs it incurs. Separately, it is waiting on a final decision on whether it can recharge airlines £500m for costs in preparation for the building of a third runway. The airport, which is owned by a consortium including Spanish infrastructure giant Ferrovial and the Qatari state, appealed to the CAA to increase charges after the Covid-19 pandemic brought air travel to a near-standstill. Heathrow said revenue losses in 2020 and 2021 would top £2.2bn and submitted a request over the summer that £1.7bn could be recouped. The CAA said on Friday: “While [Heathrow] has raised important issues that result from the Covid-19 pandemic, we do not currently consider that [the airport] has demonstrated that its request is a proportionate response.” A spokesman for Heathrow said: “We are disappointed with the CAA’s initial assessment and believe that it is not the right outcome for passengers. It risks further job losses at Heathrow and will make future improvements for passengers much more expensive. We intend to respond robustly to the CAA.” IAG, the FTSE 100 owner of BA and Heathrow’s biggest customer, has previously criticised the current mechanism that allows the airport to bill carriers for costs it incurs. A spokesman for IAG said: “We welcome the C

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