Q6 Full Business Plan - Heathrow Airport

Introduction and context
Passengers’ interests are at the heart of Heathrow’s planning and
operations. We have invested over £11 billion since 2003, consistently
focusing on service delivery. But we’re not finished and this document sets
out our plans to continue to improve the passenger experience during Q6.
1.1 Purpose
At the request of the Civil Aviation Authority (CAA), this
document sets out Heathrow’s Full Business Plan (FBP) for
the next quinquennium (Q6) – the period April 2014 to
March 2019. It serves as a basis for the CAA to determine
the airport’s regulated aeronautical charges in Q6.
The business plan defines the outcomes the passenger
would experience as a result of our investment plans
together with the level of aeronautical charges necessary
to support this plan.
The FBP contains our current thinking and has been
approved by both the Heathrow Executive Committee
and the Heathrow Board. Throughout this year, we will
continue to update and elaborate our plans as they
mature. Where necessary, we will alter these plans in
response to stakeholder feedback, any market or wider
economic developments, or other relevant factors, in
time to inform the CAA’s final proposals.
1.2 Regulatory context
This business plan has been prepared in accordance with
the CAA’s stated requirements and Heathrow’s obligation
to provide a business plan to help inform the CAA’s Q6
regulatory review. The FBP is based on an assumed
continuation of the existing regulatory construct –
incentive regulation using a Regulated Asset Base (RAB)
based single-till.
The nature of RAB based regulation demands that a
bottom up, thorough review of each of the different
building blocks is undertaken by the CAA. Therefore,
the business plan is based on a detailed bottom-up
assessment of each ‘building block’ and other key
components, and presents a consolidated view of the
integrated financial forecasts for our business.
The inter-dependent nature of the ‘building blocks’,
and the requirement to carefully integrate each variable,
means that ‘top down’ adjustment of any individual
variable in isolation is not feasible. The effect of any
proposed adjustment to individual variables can only
be analysed in the context of the potential impact on
other variables and the integrated financials. Therefore,
a ‘top down’ approach, based on some notional view
of stakeholder expectations, would be inconsistent with
the ‘building block’ approach and the prevailing
regulatory model.
© Heathrow Airport Limited 2013
Heathrow Q6 Full Business Plan - Public version | Chapter 1 Page 5