Efficiency incentives to apply to the economic regulation of Heathrow

Home > News Archive > Efficiency incentives to apply to the economic regulation of Heathrow
2nd April 2019
HeathrowThe Civil Aviation Authority (CAA) has published a report by CEPA alongside its policy update and consultation on the economic regulation of capacity expansion at Heathrow Airport (CAP 1782).
 
The CEPA report focuses on developing detailed descriptions of potential approaches for the implementation of capital efficiency incentives. Under the potential approaches, Heathrow would bear a predetermined share of any capital expenditure under- or over-spend, with the application of ‘ex-ante’ incentives. This differs to the current approach applied at Heathrow, whereby a retrospective (‘ex post’) review is used to assess inefficiency.

The CEPA report discusses two main options, with variants discussed within each option. The CAA is inviting views from stakeholders on the approaches set out in the report and which of the two models provides better incentives on Heathrow to control the overall costs of its capital programme.

To find out more about CEPA’s work in the transport sector and for information about how to engage the firm, please contact Richard Rodger by email or T. +44 (0)20 7269 0210