the CAA said - Heathrow Airport

CAP 1027
Chapter 2: Context for the CAA's initial proposals
area, it would therefore have SMP over airport charges and other
aeronautical services, the detail of which is set out in the product
bundle of the HAL market power assessment. The CAA is not
required to cover all airport operation services in its assessment.
However, using a single till approach, the CAA would seek to take
account of revenues from these services in setting regulatory controls
on airport charges as it does at present.
2.21 Under its general duty in section 1(1) of the Act the CAA must carry
out its functions in a manner that it considers will further users’
interests. Where a licence is issued, under section 18(1)(b) the CAA
can include such other conditions that it considers necessary or
expedient having regard to its general duty and, under section
21(1)(f), provisions relating to activities carried on outside the airport
area for which the licence is granted. These conditions and provisions
do not need to be supported by a separate MPT under the Act.
2.22 Overall the CAA considers that the single till methodology for Q6 is in
the users’ interests.
Components of the price cap for Q6
2.23 There appears broad consensus between HAL and the airlines that
the CAA should continue to calculate the price cap in relation to a
maximum average revenue yield per passenger. The calculation of
the price cap involves a number of ‘building blocks’ as shown in figure
2.3. This document sets out the CAA’s initial proposals on each of
these components.
April 2013 Page 35