LONDON – The UK Civil Aviation Authority (CAA) has set a cap on Heathrow Airport’s future charges, which will result in reductions in the next few years.
It is understood the average maximum price per passenger that airlines will pay the airport will fall from £30.19 today to £26.31 in 2026.
When inflation improves, this will represent a 6% reduction every year up to 2026.
The measures set out by the CAA have the following three things:
- A five-year control period will allow the airport to reduce charges for consumers and provide investors with medium-term certainty. The control period, known as H7, runs from 2022 to 2026.
- Affordable charges for consumers will also support the recovery in passenger numbers.
- Allowing Heathrow to appropriately invest in keeping the airport safe, secure, and resilient, while at the same time providing a good experience for passengers. This includes investing in next-generation security equipment and a new baggage system for Terminal 2.
On top of this, the CAA believes this will benefit consumers for the following reasons:
- Our primary duty as the UK’s aviation regulator is to protect the interests of consumers, both in the short and long term, and today’s announcement will bring considerable passenger benefits. This will include allowing significant investment to improve Heathrow for passengers, such as £1.3bn upgrading Terminal 2’s baggage facilities and introducing new generation security scanners to help reduce queues in the future.
- Heathrow is among the most expensive airports in the world for its charges to airlines and it is important to note that the H7 five-year period will see airport charges reduce over time from today’s level.
Heathrow Airport will begin the consultation process on its future airport charges as early as August, and once the airport files a final proposal, the CAA will decide on modifications to the license.
Moriarty: Doing The Right Thing for Consumers…
Commenting on this proposal was Richard Moriarty, the CEO of the UK CAA:
“Today’s announcement is about doing the right thing for consumers.”
“We have listened very carefully to both Heathrow Airport and the airlines who have differing views to each other about the future level of charges.”
“Our independent and impartial analysis balances affordable charges for consumers while allowing Heathrow to make the investment needed for the future.”
Moriarty also believes that the proposals laid out by the CAA will allow significant investments to be made out of Heathrow, including a £1.3bn upgrade in Terminal 2 for baggage facilities and new security scanners.
It remains clear that the CAA is making the correct steps in allowing the consumer to spend less on such airport charges.
This proposal will no doubt be welcomed by other airlines such as British Airways, who have always argued with Heathrow about airport charges.
Looking ahead, it will be interesting to see whether inflation will fall, because if it doesn’t, it may not allow the charges to decrease to the level proposed by 2026.