Heathrow airport passenger charges to fall every year up to 2026

‘The CAA’s proposal will only result in passengers getting a worse experience at Heathrow as investment in service dries up’ – CEO John Holland-Kaye

Departing soon: passengers at Heathrow Terminal 2 (Simon Calder)

Passenger charges at Britain’s busiest airport will fall every year up to and including 2026 under proposals published by the Civil Aviation Authority (CAA).

The authority, which regulates fees at Heathrow, says the average maximum price per passenger that airlines will pay the airport will fall from £30.19 today to £26.31 in 2026.

“When the effects of inflation are removed, this is equivalent to nearly a six per cent reduction every year from today’s level up to 2026,” the CAA says.

The chief executive of Heathrow, John Holland-Kaye, immediately  condemned the proposals, saying: “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.”

Speaking to The Independent, CAA chief executive Richard Moriarty said: “I disagree profoundly with that. It’s clear that Heathrow’s shareholders will have to work harder over the next five years to provide a service.

“The package also includes service quality targets as well.

“Seven per cent of Heathrow’s revenue is at stake if they don’t deliver.

“Heathrow’s already one of the most expensive airports in the world.

“We think that with the strong recovery it’s right and proper the analysis shows that Heathrow can reduce its charges.”

The targets include security queuing times and passenger satisfaction.

Under the CAA proposals, Heathrow would spend a further £3.6bn on investment, including a new £500m baggage system for Terminal 2.

A failure in the existing system led to a mountain of luggage building up at the airport 10 days ago.

Mr Holland-Kaye said: “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.”

But airlines say the proposed cuts do not go far enough. Tim Alderslade, chief executive of Airlines UK, the industry body representing UK-registered carriers, said: “Charges are still too high at Heathrow – the most expensive airport in the world – and so the CAA can and should go further to bring it into line with other European hubs.”

The chief executive of Virgin Atlantic, Shai Weiss, said: “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.”

Willie Walsh, director general of the airline group, the International Air Transport Association (Iata), said: “Right now, charges are initially going up by a staggering 56 per cent compared to 2021. This is based on false assumptions that are already being proven wrong by the strong post-pandemic demand for travel.

“Independent analysis has shown that charges could fall today, while still protecting investment and a generous rate of return for Heathrow.

“The CAA must stop rewarding this monopoly whose insatiable desire to gouge its customers will damage the competitiveness of ‘Global Britain’.

“Unless the CAA takes the opportunity to protect today’s consumers, the whole process should be reviewed.”

After the consultation, a final decision is expected to be made in autumn 2022.