Consultations implementing the H7 Final Determination

CAP3073 This consultation sets out our Initial Proposals for the CAA’s mid-term review of the Outcome Based Regulation scheme for Heathrow Airport Limited and asks for stakeholder views. We have also published Grant Thornton’s mid-term review targets study.

This letter (April 2024) sets out the scope for the CAA’s mid-term review of the Outcome Based Regulation scheme for Heathrow Airport Limited and asks for stakeholder views.

Responses

• Airline Operators Committee and London (Heathrow) Airport Consultative Committee (AOC / LACC)
• Council for the Independent Scrutiny of Heathrow Airport (CISHA)
• Heathrow Airport Limited (HAL)
  • Heathrow response
  • Heathrow Airport Carbon Footprint Methodology Document
  • H7 Airport that meets my needs - Target modelling
• Heathrow Southern Railway

This letter (December 2024) sets out the scope for the CAA's review of H7 Terminal Drop Off Charge Revenue Allowances relating to Heathrow Airport Limited and asks for stakeholders' views.

Reponses

• Aer Lingus
• Airline Community
• British Airways
• Heathrow
  • Annex B
• Heathrow Strategic Planning Group
• Iberia
• International Airlines Group
• Vueling

Economic regulation of Heathrow airport: H7 final issues – decision (CAP3001) sets out our decisions on both:

• the matters that were remitted to us by the Competition and Markets Authority by its Final Determinations of the appeals of our Final Decision on the H7 price control; and
• the matters that we had not been able to resolve prior to making the Final Decision.

These matters are:

• the approach to calculating the adjustment to revenues for 2020 and 2021;
• the “index-linked premium” used to calculate the cost of debt;
• verification of the “shock factor” used in the passenger forecast;
• the appropriate contributions to the opex allowance for pension deficit repair costs and business rates; and
• treatment of HAL’s revenues from its “Pod parking” product.

The decision sets out our analysis of stakeholders’ views on each of these issues, our decisions on each matter and the statutory notice of the licence modifications we have decided to make to implement them. This decision document also addresses a number of minor, technical and other issues that have emerged since the Final Decision.

CAP2980 Economic Regulation of Heathrow: H7 final issues deals with both the matters that were remitted to us by the Competition and Markets Authority by its Final Determinations of the appeals of our Final Decision on the H7 price control and the matters that we had not been able to resolve prior to making the Final Decision. This consultation sets out our analysis of each of these issues, our proposals for resolving them and the statutory notice of the licence modifications we propose to implement our proposals.

We have published the Price Control Model and a report on the Cost of Index-Linked Debt.

The CAA has asked GAD to perform a review of the deficit repair costs of Heathrow Airport Ltd. This report sets out the results of our analysis.

Responses

• Airlines for America
• British Airways
• Heathrow Airport Ltd
  • Heathrow Airport Ltd letter to Joint Steering Board
• Heathrow AOC and LACC
• Virgin Atlantic Airways
  • Virgin Atlantic Airways Appendix A

CAP2605 H7 Guidance on capital expenditure governance sets out the CAA’s updated guidance on capital expenditure governance for the H7 period, following a consultation on draft guidance issued in March 2023.

We have written to Heathrow (December 2023) to provide our assessment of the responses received to our consultation on draft terms of reference for Independent Review of Heathrow Airport Limited’s cost allocation methodology for Other Regulated Charges, and to confirm the final terms of reference for the independent review.

Responses

• Arora Group
• Heathrow Airport Ltd
• Heathrow AOC
• International Airline Group (IAG)
• Pandox

This letter (November 2023) sets out the CAA’s approach to the independent review of HAL’s cost allocation methodology for Other Regulated Charges and details a draft terms of reference for the Independent Review that HAL should use when procuring the reviewer and facilitating the review.

CAP2591 H7 Guidance on Other Regulated Charges (ORC) protocols and dispute resolution for Heathrow Airport.  This confirms the high-level principles that HAL should follow when working with stakeholders to develop new protocols and a dispute resolution function for Other Regulated Charges.