Heathrow charges to rise by 50 per cent

Saturday, December 18, 2021

The UK’s Civil Aviation Authority (CAA) has agreed to increase its cap on passenger charges at Heathrow airport by just over 50 per cent, meaning air fares at the nation’s main hub could increase.

The CAA has placed an interim price cap of £29.50 in 2020 prices, rising to £30.19 in 2021 prices due to high rates of inflation. That’s an increase of nearly £10 on the current cap of £19.60.

This cap will apply from 1 January until the summer of 2022, when a new five-year price control period will take effect.

Heathrow had asked the regulator to allow it to increase passenger charges by 90 per cent to recoup some of the losses it has experienced during the pandemic, but the CAA said it wanted to protect the interests of both consumers and shareholders.

A spokesperson for the airport said Heathrow is “extremely disappointed” by the increase, saying it risked limiting the company’s ability to invest in improving services for passengers.

On the other hand, airlines have condemned the price increase, which comes at a time of renewed uncertainty in the face of the Omicron variant of COVID-19.

International Airlines Group CEO Luis Gallego said that the UK’s economic recovery depends on its ability to compete on the global stage. A cost-efficient Heathrow would benefit UK consumers, businesses and trade. Global Britain needs a global and competitive hub.

Tim Alderslade, CEO of trade association Airlines UK, commented that the CAA has a statutory responsibility to protect consumers and if it thinks a 50 per cent increase in passenger charges at the world’s most expensive airport is the way to do this, then something has gone very wrong.

Virgin Atlantic chief executive Shai Weiss said the airline would consider options to appeal to the Competition & Markets Authority so that passengers are protected from these egregious proposals and ensure the CAA fulfills its duties.

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