Heathrow will be allowed to increase significantly its landing charges by the aviation regulator in July next, although it has ruled out the near-doubling of charges proposed by the airport.
Airlines reacted with dismay at the Civil Aviation Authority's plans, which could allow the UK s biggest airport to increase charges by up to 56% by 2023 as it seeks to recover losses from the pandemic.
The CAA has launched a consultation on a range of airport charges a passenger from 24.50 to 34.40, an increase from 22 a passenger in 2020 It said it sought to protect consumers from unfair charges and that it would work closely with Heathrow, airlines and others to narrow this range over the next few months.
The ranges will come into effect in summer 2022 with an interim of 30 for next year.
Heathrow had called for charges to range from 32 to 43 passengers as it seeks to reduce losses caused by the coronavirus pandemic a sum that led Willie Walsh, the ex-AIG boss of Iata, to accuse the airport of gouging its customers.
The airport said in July that its total losses achieved in the past two years have reached 2.9 billion. In September, passenger numbers were 38% of pre-pandemic levels.
While international air travel is still recovering, setting a price control for Heathrow airport against the backdrop of so much uncertainty means we have had to adapt our approach. Our principal objective is to further the interests of consumers while recognising the challenges face by the industry during the Covid pandemic.
These initial proposals seek to protect consumers from unfair charges, and will allow Heathrow to continue to invest appropriately in keeping the airport resilient, efficient and one that provides a good experience for passengers. Heathrow's request for an additional adjustment to its regulatory asset base to make up losses caused by the pandemic on top of the 300 m it allowed in April was rejected by the CAA. Heathrow had requested a 2.6 bn increase under the funding model that recovers airport investment through demilitarisation charges.
A Heathrow spokesperson said: Our aim is to reach a settlement that allows us to provide passengers with a great service while operating a safe, resilient and competitive hub airport for Britain. The fact that Heathrow is ranked as one of the best airports in the world by its passengers is a testament to private investment over the past decade, and we believe the settlement should safeguard fair return for investors.
While it is right the CAA protect consumers against excessive profits and waste, the settlement is not designed to shield airlines from legitimate cost increases or the impacts of fewer people travelling. However, airlines have said that the proposals were unacceptable. Has Heathrow failed to protect the British consumer, saying: The world s most expensive airport risk becoming over 50% more expensive, as Shai Weiss and its owners seek to recoup their pandemic losses and secure hundreds of millions in dividends to shareholders. It is concerning that the regulator has failed in its first opportunity to step in, and together with industry partners will oppose these proposals in the strongest terms to protect passengers. Luis Gallego, the chief executive of IAG - British Airways, said: "International connectivity is vital for the UK economy s economic recovery." Heathrow airport is already the most expensive airport in the world. The disproportionate increase compared to other European hubs will undermine its competitiveness even further and UK consumers will lose out. He said that IAG would engage in the regulator s consultation to advocate for British consumers over the interests of Heathrow shareholders.