Proposal to extend by one year the current price control on Heathrow Airport Limited

Closed 2 Sep 2016

Opened 27 Jul 2016

Overview

This consultation sets out our proposal to extend the current price control (Q6) on Heathrow Airport Limited by one year, so that it expires at the end of 2019 rather than the end of 2018.  Our current view is that an extension by one year (Q6+1) would be in the interests of users on the basis that it will reduce the risk that the H7 process is sub-optimal due to runway uncertainty and lower levels of industry engagement.

We propose the extension should be implemented by a rollover of the existing cap, i.e. a price path of RPI-1.5%.   A straightforward rollover would be consistent with our approach to the extension of Q5 and our discussions with industry stakeholders indicate that this is also their preferred option.

The deadline for consultation responses is Friday 2nd September 2016.

Why We Are Consulting

The current regulatory controls on the charges and services that Heathrow Airport Limited (HAL) offers to airlines, and ultimately to consumers , are due to expire on 31 December 2018.   In March this year, we launched a review (referred to as ‘the H7 review’) of the appropriate regulatory arrangements that should apply in the next regulatory period from 1 January 2019 and published a discussion document on the strategic themes for the H7 review.  In written responses and through subsequent discussions, industry stakeholders suggested that we should consider extending the current Heathrow price control period by at least one year.

Audiences

  • Commercial airlines
  • Airport operators
  • Industry representative bodies

Interests

  • Economic regulation