The UK Civil Aviation Authority (CAA) has set out what charges London Heathrow can demand of its airline customers over the next few years. The UK’s largest airport will have to reduce the maximum price per passenger.
The CAA said in a statement on June 28, 2022, that the average maximum price per passenger will fall from £30.19 ($36.96) today to £26.31 ($32.21) in 2026 under its final proposals. That’s equivalent to a 6% reduction per year, when the effects of inflation are removed, the CAA said. It’s still a jump from the £22 ($26.93) per passenger charged in 2020 though.
Earlier in the price-setting process, Heathrow had asked to charge between £32 and £43, while the CAA proposed a range of £24.50 to £34.40.
The regulator said it wanted to do “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,” Richard Moriarty, Chief Executive at the UK Civil Aviation Authority, commented in an announcement. “Our independent and impartial analysis balances affordable charges for consumers, while allowing Heathrow to make the investment needed for the future.”
Heathrow said the price levels would restrict improvements to the airport and deter private investors.
“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,” Heathrow CEO John Holland-Kaye responded in a statement. “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.”
Airports association ACI Europe described the CAA proposals as deeply concerning, saying solid and stable investment was needed. “The UK needs and deserves a thriving Heathrow airport. This is not the way to get it,” director general Oliver Jankovec said.
The @UK_CAA‘s proposals on @HeathrowAirport charges are deeply concerning. The passenger interest lies in solid and stable investment in infrastructure and decarbonisation both now and in years to come. A thriving Heathrow Airport is a cornerstone of the UK economy. pic.twitter.com/oV4P5Upo56
— ACI EUROPE (@ACI_EUROPE) June 28, 2022
On the other side, Airlines UK, the industry body representing UK carriers, described the CAA’s announcement as positive, but said more could be done.
“Charges are, though, 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,” Tim Alderslade, CEO of Airlines UK, said. “This is fundamental to the competitiveness of all of UK aviation as we emerge out of the worst crisis in its history.”
Willie Walsh, the director general of global airline body IATA and who has long criticized Heathrow’s prices, also highlighted that charges had already jumped up from previous years.
“It’s two steps back and eventually one step forward. While it’s good that charges will slightly fall in the long term, the reality is that the UK’s competitiveness, passengers and airlines need help now,” Walsh said in a statement.
The UK CAA will publish its final decision on the Heathrow charges in fall 2022, after considering any responses received during a consultation.