Currently, the average maximum price per passenger at Heathrow is £30.19.
In its final proposal, the CAA said that this would be reduced to £26.31 over the next five years.
Excluding the impact of inflation, this is said to represent a decrease of almost 6% each year from the current level.
Meanwhile, Heathrow, which wanted the charges to rise to £41.95, has argued that lowering the charges will translate into a worse experience for travellers.
Heathrow CEO John Holland-Kaye stated: “The CAA continues to underestimate what it takes to deliver a good passenger service, both in terms of the level of investment and operating costs required and the fair incentive needed for private investors to finance it.”
Airline companies have long opined that Heathrow is already among the globe’s most expensive airports.
For its part, the CAA said that its decision comes in light of the recent air travel recovery and will enable the airport to make appropriate investments to increase security and resilience.
The aviation watchdog’s final proposal was released after consultations, which ran from 17 October and 17 November 2021 and ended this January.
UK CAA CEO Richard Moriarty said: “Today’s announcement is about doing the right thing for consumers. We have listened very carefully to both Heathrow Airport and the airlines, who have differing views to each other, about the future level of charges.
“Our independent and impartial analysis balances affordable charges for consumers while allowing Heathrow to make the investment needed for the future.”
The package of measures highlighted in the proposals includes a five-year control period referred to as H7, which will be in place from 2022 to 2026.
The regulator said that this will enable the airport to cut down charges for consumers, supporting the rebound in passenger traffic, and offer medium-term certainty to investors.
The move is also anticipated to enable the airport to make investments, including next-generation security equipment and a new baggage system for Terminal 2.