UK regulator orders Heathrow Airport to lower passenger fees

The UK Civil Aviation Authority (CAA) has determined the fees that London Heathrow can charge its airline customers for the next several years. The major airport in the United Kingdom must cut the maximum price for each passenger.

The CAA said in a statement on June 28, 2022, that under its final plans, the average maximum price per passenger will decrease from £30.19 ($36.96) to £26.31 ($32.21) in 2026. According to the CAA, the impacts of inflation are excluded; this equates to a 6 percent annual decrease. However, this increases from the £22 ($26.93) per passenger charged in 2020.

Heathrow initially requested a price range between £32 and £43, while the CAA recommended a range between £24.50 and £34.40.

The regulatory agency stated that it desired to "do the right thing" for consumers.

Richard Moriarty, Chief Executive of the UK Civil Aviation Authority, stated in an announcement, "We have listened very carefully to both Heathrow Airport and the airlines, who have differing opinions regarding the future level of charges." "Our independent and objective analysis strikes a balance between consumer affordability and Heathrow's ability to make future investments."

Heathrow stated that the pricing levels would limit airport expansions and discourage private investors.

Heathrow CEO John Holland-Kaye reacted in a statement, "The CAA continues to underestimate what it takes to provide 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." Uncorrected, these aspects of the CAA's proposal would only deteriorate the customer experience at Heathrow as service investment dries up.

The Airports Association of Europe (ACI Europe) criticized the CAA's recommendations as highly unsettling, citing the necessity for a substantial and secure investment. "The United Kingdom requires and merits a successful Heathrow airport. "This is not the way to get it," stated general director Oliver Jankovec.

Airlines UK, the trade association representing UK airlines, viewed the CAA's move as promising but stated that more could be done.

"Charges are still too high at Heathrow, the most expensive airport in the world," said Tim Alderslade, CEO of Airlines UK. "The CAA can and should do more to bring it in line with other European hubs." "This is crucial to the competitiveness of the entire UK aviation industry as we emerge from its worst crisis in history."

Willie Walsh, the director-general of the international airline association IATA, who has long criticized Heathrow's costs, also emphasized that fees have already increased from prior years.

"There are two steps back followed by one stride forward. While it's positive that prices will decrease marginally over time, the reality is that the UK's competitiveness, customers, and airlines need immediate assistance, Walsh said.

After reviewing all consultation answers, the UK Civil Aviation Authority (CAA) will publish its final decision on Heathrow taxes in the fall of 2022.