Heathrow given green light to raise passenger charges by more than 50%

The Civil Aviation Authority said the increase ‘reflects the uncertainty of the recovery of passenger volumes from the pandemic’.

Heathrow has been given permission to raise charges by more than 50% from January 1 (Steve Parsons/PA) (PA Archive)

Passengers travelling through Heathrow Airport could be hit by an increase in charges of more than 50% from next month.

The Civil Aviation Authority (CAA) said the cap on the west London airport’s price per passenger will be £30.19 from January 1.

The current charge is £19.60.

Charges are paid by airlines but are generally passed on to passengers in air fares.

A decision on a long-term cap which is expected to begin in summer 2022 and run to 2027 is due to be announced early next year.

A spokesman for Heathrow, which had called for the cap to range from £32 to £43, said it was “extremely disappointed” with the interim figure of £30.19.

He claimed it “relies on rushed analysis and will undermine passenger experience” at the airport.

He went on: “There are material and basic errors in many aspects of the CAA’s assessment.

“Uncorrected, this risks leaving Heathrow without sufficient cash flow to support investment in improving passenger service and resilience.”

Luis Gallego, chief executive of British Airways’ parent company IAG said the firm is “disappointed that Heathrow charges will increase further” as it is “already 44% more expensive than its European competitors”.

He continued: “After the worst crisis in aviation history we need to attract demand to stay competitive. Hiking charges will have the opposite effect. Britain will become not more competitive, but less.

“A cost-efficient Heathrow would benefit UK consumers, businesses and trade. Global Britain needs a global and competitive hub.”

The CAA should be preventing rather than endorsing this monopolistic behaviour

Tim Alderslade, Airlines UK

Tim Alderslade, boss of trade body Airlines UK, said the CAA has a responsibility to protect consumers and if it believes a 50% increase in charges is the way to do that “something has gone very wrong”.

He added: “Heathrow is behaving as if it’s the only company to be adversely hit by Covid.

“Airlines have taken on billions of pounds in debt to stem their losses, with their shareholders, not passengers, footing the bill.

“Meanwhile, Heathrow’s wealthy shareholders have taken out more than £100 million in dividends without investing a penny of new equity.

“The CAA should be preventing rather than endorsing this monopolistic behaviour.”

Heathrow’s owners include sovereign wealth funds from China and Qatar, Spanish construction firm Ferrovial, and large infrastructure funds.

The airport has reportedly paid out nearly £4 billion in dividends to shareholders since 2012.

The £30.19 cap “reflects the uncertainty of the recovery of passenger volumes at the airport from the pandemic, particularly following the emergence of new information about the Omicron variant of Covid-19”, according to the CAA.

The cap will move up or down depending on factors such as passenger numbers and commercial revenue.

Heathrow said in September its losses from the Covid-19 pandemic had hit £3.4 billion.

Passenger numbers are around 40% of pre-pandemic levels.