Heathrow fees capped
BRITAIN’S aviation regulator said that Heathrow, the country’s busiest airport, will not be permitted to increase passenger charges as much as it had wanted, as the hub and its airlines vie against each other to recover pandemic losses.
Covid-19 has restricted flying for more than 18 months, putting huge financial strain on Heathrow and the airlines that use it, including its biggest customer British Airways, and making airport charges the subject of a bitter row.
The UK’s Civil Aviation Authority (CAA) said in its initial proposals on Tuesday (19) that Heathrow could raise its per passenger charge to between £24.50 and £34.40. Heathrow had requested the cap be set at between £32 and £43.
In 2020, the charge was £22 per passenger.
Heathrow wants to be able to charge more to help recover its losses, but airlines don’t want to have to raise ticket prices to cover higher airport charges just when they are trying to stimulate passenger demand.
The CAA said that its proposals struck the right balance between consumer interests and the airport.
Heathrow is owned by investors, including Spain’s Ferrovial, the Qatar Investment Authority and China Investment Corp.
During the pandemic, its losses topped $4 billion (£2.89bn) as traffic fell by more than 80 per cent. BA parent company IAG, which made a €7bn (£5.9bn) loss in 2020, said recently that Heathrow’s investors had already earned billions in dividends from the airport before the pandemic struck, and that now was the time for Heathrow to be price competitive.
Last year Heathrow lost its crown as Europe’s busiest airport to Paris. Heathrow said that the regulator should safeguard a “fair return” for its investors.