Heathrow passenger fees to surge by 53% from January
‘Heathrow is already the world’s most expensive hub airport’ – Luis Gallego, CEO of British Airways’ parent company, IAG
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Your support makes all the difference.Airport fees for passengers departing from Heathrow are set to rise way ahead of inflation, with the current £19.60 per person charge rising to £30 on New Year’s Day.
The Civil Aviation Authority (CAA) has raised its cap on passenger fees by 53 per cent while it conducts a consultation on the rates that should apply in the five-year spell from summer 2022.
For decades Heathrow was by far the busiest airport in Europe. Passenger demand was so strong that, on a purely commercial basis, charges could have reached £50 or more per passenger.
To prevent fees rising way beyond any other airport and inflating the cost of flying, the Civil Aviation Authority (CAA) capped the amount Heathrow can charge.
But as a result of the Covid-19 crisis and government travel restrictions, the airport has slipped way down the European league.
According to figures issued on Tuesday morning by Eurocontrol, Heathrow was in fifth place behind Amsterdam, Istanbul, Frankfurt and Paris Charles de Gaulle for flights operated last week– having lost 42 per cent of 2019 traffic, more than any of its busier rivals.
By July 2021, Heathrow’s cumulative losses during the pandemic had grown to £2.9bn. The airport’s owners had hoped fees could more than double to help it recover financially.
Heathrow asked the CAA increase the cap on its charges per passenger to between £32 and £43 – representing a rise in the range of 63 to 119 per cent on current levels.
In response, the CAA says it is looking at a range of £24.50 to £34.40, equating to a rise of between 25 and 75 per cent. The £30 fee from New Year’s Day is an interim measure to enable Heathrow to start to reduce its losses. The final charge could be the same, higher or lower.
The CAA’s chief executive, Richard Moriarty, said: “While international air travel is still recovering, setting a price control for Heathrow airport against the backdrop of so much uncertainty means we have had to adapt our approach.
“Our principal objective is to further the interests of consumers while recognising the challenges the industry has faced throughout the Covid-19 pandemic.
“These initial proposals seek to protect consumers against unfair charges, and will allow Heathrow to continue to appropriately invest in keeping the airport resilient, efficient and one that provides a good experience for passengers.
“We look forward to working with all stakeholders as we refine this package of measures in the coming months, before setting out our final proposals next year.”
In response, a Heathrow spokesperson told The Independent: “Our aim is to reach a settlement that enables us to give passengers a great service while operating a safe, resilient and competitive hub airport for Britain.
“That Heathrow is ranked by passengers as one of the best airports in the world is testament to the power of private investment over the past decade, and to enable this to continue, we believe the settlement should safeguard a fair return for investors.
“We provide great value for money, which is why airlines generate premium profit margins on their services from our world-class facilities.
“While it is right the CAA protect consumers against excessive profits and waste, the settlement is not designed to shield airlines from legitimate cost increases or the impacts of fewer people travelling.
“We look forward to discussing the CAA’s proposals in detail with the regulator and our airline partners as we work towards a new settlement.”
The main airline at Heathrow is British Airways – part of the IAG consortium, whose chief executive, Luis Gallego, attacked the rise.
He said: “Heathrow is already the world’s most expensive hub airport. The disproportionate increase compared to other European hubs will undermine its competitiveness even further and UK consumers will be losing out.
“A cost-efficient Heathrow would benefit travellers, businesses and the UK economy as a whole. Airport charges must be competitive if Global Britain is to become a reality.
“We will engage in the regulator´s consultation to ensure aviation can play its part to deliver this, and to advocate for UK consumers over the interests of Heathrow’s shareholders.”
The CAA has rejected Heathrow’s request for an increase of £2bn in its “regulated asset base”, the figure used to compute passenger charges.
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