London Heathrow Airport’s landing fees have always been a controversial part of UK aviation. We ask: Why were they so high?
Recently, the UK CAA has been reduced from £31.57 per passenger to £25.43 and has been praised but also criticized by both groups.
With this in mind, let’s take a look into the current arguments at London Heathrow Airport…
The Competitive Argument For Low Landing Fees at London Heathrow…
There is a competitive argument for low landing fees at London Heathrow.
Ultimately, if such fees increase on a per-passenger basis, this cost will eventually be passed onto the consumer.
However, this is something that is a difficult thing to manage, both on an airline basis and on an airport basis too.
Operators such as British Airways and Virgin Atlantic will want lower landing fees for better profitability, whilst the owners of Heathrow will want the same.
According to a report from the Financial Times, the airport is wanting to push the cap up to £40 per passenger, based on a pre-tax loss of £684m in the last financial year.
The Pressure Group Argument…
Back Heathrow, the campaign group that represents over 100,000 residents that live close to the airport, has formally expressed concerns about the CAA decision on how much Heathrow can charge airlines.
Parmjit Dhanda, Executive Director of Back Heathrow, said: “During Covid, tens of thousands of people were furloughed in the boroughs around Heathrow because when Heathrow struggles, we all suffer.”
“At a time when the airport has started creating jobs again and funding over £1m a year for local community projects, local boroughs need to see stability at our biggest provider of jobs and prosperity.”
Mr. Dhanda added: “Through Covid, we learned the hard way that local councils and local people need a strong, vibrant Heathrow Airport, so we’re disappointed with the CAA’s decision and hope it’s not too late for a rethink.”
“Backward steps for Heathrow only lead to growth at international hub rivals, like Paris and Frankfurt – which is bad for local people and businesses.”
Heathrow’s Ownership Structure…
There has been criticism applied to London Heathrow Airport over landing fee charges, especially from the perspective of the ownership structure.
China’s investment corporations, Qatar’s Investment Authority, and one of Canada’s largest pension funds own a lot of the assets at Heathrow Airport.
This is producing the following question: Is this all about making money?
If the airport produced a loss of £684m in the last financial year, then it would make business sense to recoup those losses.
And this is where it is difficult to find the happy medium that the UK CAA is wanting to achieve, but we will no doubt see appeals made moving forward.
Overall…
It remains clear that the airport is trying to do everything it can to provide not just a good service but also generate the profitability that comes with that.
For the airline industry and the operators out of the airport, it is also going to be a difficult time, although the reduced fees will no doubt be welcomed.
Even so, the airline industry will probably be gunning for further reductions, but is this manageable with the airport’s balance sheet?
Only time will tell as the debates continue.
