CAA says Heathrow to cut passenger charges by 2026

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CAA says Heathrow to cut passenger charges by 2026

The Civil Aviation Authority said Heathrow would have to cut passenger charges for airlines each year until 2026.

The reduction in charges was due to the recent rebound in passenger numbers, but it would still allow the airport to invest, according to the regulator.

Heathrow, which wanted the charges raised, said the move would undermine the delivery of key improvements.

The charges are paid by airlines but can be passed onto passengers via airfares.

The fees go towards security, airports, baggage systems, and operating terminals.

The average charge per passenger at Heathrow is 30.19, and the CAA has said that will fall to 26.31 by 2026. The CAA said that the passenger charge was reduced because of anticipated increases in passenger numbers as a result of the pandemic and the higher level of the price cap in 2022, which was put in place in December 2021 to reflect the challenges of the pandemic at the time Heathrow was given permission to raise the passenger charge from 19.60 to 30.19.

Richard Moriarty, the CAA's chief executive, said the cut was about doing the right thing for consumers. He said that he listened very carefully to Heathrow Airport and the airlines who have different views on the future level of charges.

Our independent and impartial analysis balances affordable charges for consumers, while allowing Heathrow to make the investment necessary for the future. However, Heathrow chief executive John Holland-Kaye said that the regulators underestimate what it takes to deliver a good passenger service and the fair incentive for private investors to finance it Uncorrected, these elements of the CAA proposal will only result in passengers having a worse experience at Heathrow as investment in service dries up.

The strength of the recovery with more passengers coming in meant that charges could be lowered, according to Moriarty, who told the BBC's Today programme.

He said that the cap would still allow for 3.6 billion investment by Heathrow, including new baggage systems for terminal 2.

5,000 passengers were hit by Heathrow flight cancellations earlier this month after problems with the baggage system resulted in luggage piling up.

He said that problems of disabled passengers being left on planes after other passengers had got off, highlighted by BBC security correspondent Frank Gardner, meant the airport had to raise its game when it comes to disruption, and everyone in aviation wants to avoid the scenes that have been seen over the last couple of months.

Everyone is working hard to bring new people into the system with recruitment and we have put pressure on the airlines to make sure their schedules are deliverable for passengers. He said that the proposals should take 4 off the cost of a ticket from Heathrow by 2026. The 30.19 charge makes up about 5% of the cost of a typical fare from Heathrow to New York.

Shai Weiss, the chief executive of Virgin Atlantic, said the regulators can and must go further to lower the cap from its proposals.

With travel recovery underway, our collective focus should be on upholding the best possible experience for customers with fair charges, especially with consumers facing cost of living pressures and our global Britain aspirations at stake. The final decision on the charges is due in the autumn, and the plans put forward by the aviation regulator are its final proposals.

Once the CAA has made its final decision, both the airport and airlines will have the option of appealing the decision to competition regulators.