UK’s CAA (Civil Aviation Authority) released a final decision regarding the charges airports can impose in the coming years. This will require London Heathrow to reduce its passenger fees by approximately 20% in 2024.
For 2023, the hub airport of the UK is permitted to charge a maximum of £31.57 per passenger on average. However, the CAA stated that this will be reduced to £25.43 per passenger in 2024 which will stay flat until 2026 end.
While airlines want the fee to remain below £20, Heathrow insisted on taking it up to £40 per passenger. Customers bear the charge directly in the form of the ticket cost.
In December 2021, as the industry emerged from the pandemic’s depths, the airport was permitted to temporarily increase its fees by 50%.
According to the CAA, the new decision would result in an average maximum price of £27.49 per passenger flying from Heathrow over five years (2022-26). This brings a decrease of £0.90 from the CAA’s previous proposal (June 2022) that stated keeping the maximum average at £28.39 per passenger.
The CAA stated in a statement, “This lower level of charges from 2024 recognises that passenger volumes are expected to return to pre-pandemic levels and should benefit passengers in terms of lower costs, while also allowing Heathrow Airport Limited to continue investing in the airport for the benefit of consumers and supporting the airport’s ability to finance its operations.”
However, Heathrow mentioned that it would carefully consider the next steps over time while responding to the CAA’s decision. And, the airport can submit an appeal to the CMA (Competition and Markets Authority) within six weeks.
Heathrow made the statement, “The CAA has chosen to cut airport charges to their lowest real terms level in a decade at a time when airlines are making massive profits and Heathrow remains loss-making due to fewer passengers and higher financing costs. This makes no sense and will do nothing for consumers at a time when the CAA should be an incentivising investment to rebuild service.”
With “sharply differing views” on the level of charges from the airport and airlines, the CAA’s chief executive, Richard Moriarty came into defence.
He said, “Our priority in making this decision today is to ensure that the travelling public can expect great value for money from using Heathrow in terms of having a consistently good quality of service while paying no more than is necessary for it.”