The CAA has powers under the Civil Aviation Act 2012 to license airport operators that pass a market power test.
This test consists of three parts:
- A – that the airport operator has, or is likely to acquire, substantial market power in a market, either alone or taken with other such persons as the CAA considers appropriate;
- B – that competition law does not provide sufficient protection against the risk that the airport operator may engage in conduct that results in an abuse of the substantial market power; and
- C – that, for users of air transport services, the benefits of regulating the airport operator by means of a licence are likely to outweigh the adverse effects.
In January 2014 the CAA published the finding of its market power assessment of Heathrow. The CAA found that Heathrow passed the market power test and, therefore, requires an economic licence from 1 April 2014. More information about the CAA's market power assessment of Heathrow is on the following page market power assessments.
Below are documents relating to the CAA’s review of the appropriate form of regulation and licence for Heathrow.
- Economic regulation at Heathrow from 2014: Notice granting the licence (February 2014)
- Estimating the cost of capital: a technical appendix for the economic regulation of Heathrow and Gatwick from April 2014: Notice granting the licences (February 2014)
- Q6 rollover trigger definition sheets: Tunnels refurbishment project - Terminal 3 integrated baggage - Terminal 4 Code F stand 410 - Runway rehabilitation project (February 2014)
- Airline response to HAL proposal on introduction of FRQM and harmonisation of terminal security search standards in Q6 (February 2014)
- Economic regulation at Heathrow from April 2014: Notice of the proposed licence (January 2014), responses (Heathrow Airport Limited, LACC/Heathrow AOC, British Airways, Virgin, Cost of capital report by BA and Virgin)
- Estimating the cost of capital: a technical appendix for the economic regulation of Heathrow and Gatwick from April 2014: Notices of the proposed licences (January 2014)
- In Focus (short summary document) - (January 2014)
- Heathrow Airport Limited operator determination (January 2014)
- CAA charges from other revenues (ORCs) forecasts & questions, CAA ORC spreadsheet for final proposals - Heathrow bus & coach charges meeting,Heathrow ORC spreadsheet (bus & coach revised) - LACC response to CAA forecasts & questions (December 2013)
- Guidance on Q6 capex programme governance and consultation (November 2013)
- Heathrow Airport paper on aligning the regulatory cycle with Heathrow's statutory accounting period - appendices (November 2013)
- Request for additional points on the Q6 airport price control consultation process - letter to Q6 respondents (November 2013)
- Q6 service quality - passenger security interim standard: Heathrow supporting information for the CAA (October 2013)
- Operating costs spreadsheet for final proposals (October 2013)
- Addendum to final proposals (October 2013)
- Economic regulation of Heathrow Airport Limited after April 2014: the CAA's final proposals (October 2013) - responses to final proposal (including responses to responses)
- Estimating the cost of capital: a technical appendix to the CAA's final proposals for economic regulation of Heathrow and Gatwick after April 2014 (October 2013)
- Letter from Ian Byatt to CAA (September 2013)
- CAA Board meeting with Heathrow airlines (4 July 2013)
- CAA Board meeting with Heathrow Airport (4 July 2013)
- Letter to stakeholders: including draft price control condition, draft service quality rebates & bonuses condition, & consultation on draft penalties policy (May 2013) responses to draft penalties policy
- Economic regulation at Heathrow from April 2014: Initial proposals (April 2013) - responses to initial proposals
- CAA mid Constructive Engagement review letter to Heathrow (October 2012)
- Adjusting Heathrow' cost of capital for skewness: Methodological and qualitative issues - Prepared for BAA (September 2011)
- Comment on the split cost of capital proposal of Professor Helm, submitted by British Airways - Prepared for BAA (March 2012)
- CAA mandate for Constructive Engagement at Heathrow (April 2012)
(Relating to constructive engagement between Heathrow and its airline customers on the airport's business plan)
Q6 Stakeholder workshop: Heathrow 9 March 2012
The CAA sought views from the airport and airlines on its emerging thinking relating to key issues.