The UK Civil Aviation Authority reduced the charges London Heathrow airport will be able to levy from airlines over the next five years.
The hub said the fees, announced Tuesday, won’t support vital investment and that the passenger experience is set to suffer. UK airports have already been struggling with resurgent traffic as pandemic curbs ease, with flight cancellations and baggage delays mounting.
The average maximum price per passenger that airlines will pay Heathrow will fall from £30.19 today to £26.31 in 2026, the CAA said in its final proposals on the charges. Airlines backed the pricing plan, with Virgin Atlantic Airways Ltd., the hub’s second-biggest carrier, describing it as a “positive step.”
The regulator said that the pricing profile is based on an expected rebound in Heathrow’s passenger tally as the recovery from the Covid crisis continues, as well as the higher charging cap put in place in 2021 to reflect the challenges from the pandemic. The hub was Europe’s busiest before the virus hit, but the long-haul and business markets in which it specializes have been slow to recover, with passengers numbers seen down one-third this year on 2019.
“Our independent and impartial analysis balances affordable charges for consumers, while allowing Heathrow to make the investment needed for the future.” CAA Chief Executive Officer Richard Moriarty said in a statement.
Heathrow CEO John Holland-Kaye said the fees underestimate the cost of delivering a good service, both in terms of spending and operating costs and incentives needed to lure private investors.
“These elements of the CAA’s proposal will only result in passengers getting a worse experience at Heathrow as investment in service dries up,” he said.
Heathrow has been pushing to raise charges as much as 95% from an earlier level of £19.60 since Covid-19 wiped out much of the long-haul travel on which it relies. The CAA had been looking at a range of £24.50 to £34.50, with the average figure in the final proposals being £28.39.
Virgin Atlantic CEO Shai Weiss said the charge still represents a 47% hike overall and that it will lobby the CAA for lower fees in final submissions on the matter.
International Air Transport Association Director General Willie Walsh said in a statement that while “it’s good that charges will slightly fall in the long term,” the jump in fees during the pandemic is already damaging the UK’s competitiveness.
The regulator will publish its final decision on pricing in the autumn after considering responses to the proposals.
