Heathrow airport has been told to reduce passenger charges by the Civil Aviation Authority (CAA).
The CAA’s final proposals, released today, state that the average maximum charge should fall from its current level of £30.19 to £26.31 by 2026.
It says that the reduction “reflects expected increases in passenger numbers as the recovery from the pandemic continues and the higher level of the price cap in 2022, which was put in place in 2021 to reflect the challenges from the pandemic at the time.”
Richard Moriarty, CEO of the UK Civil Aviation Authority, 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.”
Heathrow airport had initially requested the CAA to increase the cap on its charges per passenger to between £32 and £43, and received backlash from airlines as a result.
The airport says that the latest proposals will lead to an inferior service at the airport.
Heathrow CEO John Holland-Kaye said:
“As the industry rebuilds, our focus is to work alongside airlines and their ground handlers to give passengers a reliable and consistent journey through Heathrow. 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. Uncorrected, these elements of the CAA’s proposal will only result in passengers getting a worse experience at Heathrow as investment in service dries up.
“Economic regulation should drive affordable private investment in Britain’s infrastructure to the benefit of users, not hamper it. The CAA’s proposal will undermine the delivery of key improvements for passengers, while also raising serious questions about Britain’s attractiveness to private investors.
“We will take time to assess the CAA’s proposal in more detail and will provide a further evidence-based response to this latest consultation. There is still time for the CAA to get this right with a plan that puts passengers first and encourages everyone in the industry to work together to better serve the travelling public.”
Shai Weiss, CEO of Virgin Atlantic, also commented on the news:
“In its final proposals for Heathrow charges, the CAA has taken a positive step towards a price cap that puts customers first. However, the regulator can and must go further to lower the cap beyond the proposed average of £28.39, adjusted for inflation, up to the end of 2026, reflecting robust demand for travel this summer and beyond.
“With travel recovery underway, our collective focus should be on upholding the best possible experience for customers with fair charges, especially with consumers facing cost of living pressures and our Global Britain aspirations at stake. Along with the industry community, we’ll respond to the CAA’s consultation with the data that supports a further reduction, while reserving the option to appeal to the Competition & Markets Authority, so that passengers are protected and the CAA’s duties are fulfilled.”
The CAA will publish a final decision on the charges in autumn 2022.