Heathrow Airport is expected to be asked to reduce its passenger fees after a sharp increase in demand for flights.
It’s unclear what impact the Air Traffic Authority’s move could have on airfares for tourists, but Heathrow warned the move could hurt the passenger experience.
It comes after the lifting of Britain’s Covid restrictions prompted a surge in demand for air travel and amid a bitter row between the airport and the airlines.
The Air Traffic Authority said the cap would be reduced by 6% when inflation is taken into account.
The Civil Aviation Authority (CAA) has announced that the average landing charge per passenger must fall from £30.19 today to £26.31 in 2026 – to the dismay of West London Airport.
Officials at the transport hub had requested that the cap should be between 32 and 43 pounds.
Fees paid by airlines for each individual passenger are typically passed on to customers in airfares – but it’s unclear whether travelers will feel the benefits of cutting costs as the industry is still reeling from the pandemic.
The announcement comes as travel chaos continues to ravage UK airports, including Heathrow, where recent images showed a “mountain of luggage” and passengers sleeping on the floor.
On January 1, the airport had been given permission to increase its average charges from the previous level of £19.60 due to the slump in passenger numbers caused by the coronavirus pandemic.
However, in the five-year control period from 2022 to 2026, that cap will be reduced to the lower end of the range of £24.50 to £34.40 that it has advised on.
The CAA said the announcements are its “final proposals,” with a “final decision” to be released in the fall.
Heathrow Chief Executive John Holland-Kaye has criticized the regulator for continuing to “underestimate what it takes to provide good passenger service, both in terms of the level of investment and operating costs required and the fair incentive that.” is required for private investors to fund it’.
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But he added that “there’s still time for the CAA to get this right”.
Mr Holland-Kaye argued: “Uncorrected, these elements of the CAA proposal will only result in passengers having a worse experience at Heathrow as investment in the service dries up.”
However, CAA CEO Richard Moriarty said the announcement was about “doing the right thing for consumers” and insisted the arguments had been “heard very carefully” by both Heathrow and the airlines .
“Our independent and impartial analysis balances affordable rates for consumers while allowing Heathrow to make the investments needed for the future,” he said.
The CAA believes Heathrow can continue to invest in improvements to the airport, such as next-generation security scanners and a £1.3bn upgrade to baggage facilities in Terminal 2.
Heathrow – which has various owners including sovereign wealth funds from China and Qatar – expects to continue to make losses this year.
However, almost £4billion in dividends have reportedly been paid to shareholders since 2012 – although the airport says no more will be paid this year.
Heathrow has previously been branded a “monopoly abuse hub airport” by the airline industry.
Virgin Atlantic CEO Shai Weiss hailed the CAA’s announcement as “a positive step towards a price cap that puts customers first.”
But he insisted the regulator “can and must go further” to lower fees to reflect “robust demand for travel this summer and beyond”.
He added: “With the recovery in travel costs underway, our shared focus should be on maintaining the best possible experience for customers with fair charges, particularly when consumers face cost of living pressures and our global UK endeavors are at stake.” stand.”
Last week Heathrow raised its annual passenger forecast due to “stronger than expected demand”.
The airport expects 54.4 million passengers to travel through its terminals this year.
That’s an increase of almost nine million from a December forecast – but remains at about two-thirds of 2019 levels.
Heathrow has been accused by airlines of downplaying the recovery in air travel demand in a bid to persuade the CAA to further increase passenger charges.
The CAA’s control period figures are based on the Office for Budget Responsibility’s inflation forecast, and the actual caps are based on actual inflation levels each year.
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https://metro.co.uk/2022/06/28/heathrow-airport-passenger-charges-set-to-be-cut-by-air-regulator-16905683/ Heathrow Airport passenger charges are to be reduced by the Air Inspectorate