Heathrow told to cut passenger charges again
By Story Agencies, March 9, 2023Heathrow Airport has been told to cut passenger charges for airlines next year, in a move that should feed through to ticket prices.
The Civil Aviation Authority decided lower charges were required due to passenger numbers recovering quicker after the height of the pandemic.
Passenger charges are paid by airlines and go towards costs for terminals runways, baggage systems and security.
The average charge per passenger at Heathrow for 2023 is £31.57 (Sh4824.75). But the regulator said this will fall to £25.43 (Sh3,886.40) in 2024 and “remain broadly flat” until the end of 2026.
Although, the charges are paid by airlines, they can impact flight prices if companies decide to pass on some costs onto passengers via airfares. It is understood bosses at Heathrow wanted charges to actually increase to more than £40 (Sh6113.08), while airlines proposed they should be no more than around £18.50 (Sh2,827.30).
Will not help consumers
In response to the decision, the airport said the CAA’s decision made “no sense” and warned it would “do nothing for consumers”.
“The CAA has chosen to cut airport charges to their lowest real terms level in a decade at a time when airlines are making massive profits and Heathrow remains loss-making because of fewer passengers and higher financing costs,” Heathrow said.
The airport said the regulator should be “incentivising investment” to rebuild aviation services following the heavy blows dealt to the industry during Covid.
“Our priority in making this decision today is to ensure the travelling public can expect great value for money from using Heathrow in terms of having a consistently good quality of service, whilst paying no more than is needed for it,” said Richard Moriarty, CEO of the CAA
In 2021, Heathrow was given permission to raise the passenger charge for airlines from £19.60 to £30.19 for the summer of 2022. The aim was to help it get through the pandemic.
But British Airways and Virgin Atlantic, two of Heathrow’s largest airlines, have long complained that fees at the airport, the busiest airport in western Europe, are the highest in the world.