Heathrow ‘considering next steps’ as airlines secure victory on passenger charges | Business News
Heathrow Airport said it was “considering next steps” after the industry regulator ruled it must cut the per-passenger fees it charges airlines from next year.
The Civil Aviation Authority (CAA) says Britain’s hub airport can charge an average maximum price per passenger of £27.49 between 2022-2026.
It marks a significant victory for airlines using the west London airport, who have long argued the fees are too high.
This year’s included fee, which is passed on to passengers via their ticket, is £31.57.
Airlines including British Airways and Virgin Atlantic have complained it is currently the tallest in the world but Heathrow says it is important to support investment and recovery from the COVID pandemic.
It sought to increase fees to a range of £32 to £43 over a four-year period.
But the CAA said in a final decision on the regulatory cap: “This lower fee from 2024 indicates that passenger volume is expected to return to pre-pandemic levels and will benefit passengers on lower costs, while allowing heather Airport Limited to further invest in the airport for the benefit of consumers and to support the ability to finance airport operations.
“The package includes a £3.6 billion capital investment program. Passengers will benefit from investments such as next-generation security scanners and a new baggage system in Terminal No. 2, is expected to have a total cost of around £1.3 billion and will provide significant benefits to passengers, including an improved security experience and more resilient infrastructure.”
A spokesperson for the company responded: “CAA has chosen to cut airport fees to their lowest practical level in a decade at a time when airlines are making huge profits and Heathrow is still losing money because of fewer passengers. more customers and higher financial costs.
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“This makes no sense and won’t help consumers at a time when the CAA should encourage investment to rebuild services. We will now take the time to carefully consider our next steps. me.”
Virgin Atlantic boss Shai Weiss welcomed the ruling but said the CAA should have gone further.
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“After almost two years of consultations and plenty of evidence to support a significantly lower price ceiling, the CAA has finally adjusted its course,” he said.
“However, the average cap of £27.49 through 2026, adjusted for inflation, still leaves passengers penalized at the world’s most expensive airport, as the airport itself has grown so much. than any other airport last year.
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“The CAA hasn’t gone far enough to push back against Heathrow’s monopoly and fulfill its statutory obligation to protect consumers.”
In a clear sign that the relationship between the airport and its airline customers remains strained, he added: “Heathrow abused his power throughout this process, giving misleading narratives and flawed passenger forecasts in an attempt to win an economic argument.”
