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Heathrow Airport must cut passenger fees amid rising demand for flights, the aviation regulator has announced
The Civil Aviation Authority (CAA) has said the cap on the average charge per passenger at West London Airport will rise from £30.19 today to £26.31 in 2026.
That equates to almost a 6% reduction each year when the effects of inflation are removed, according to the regulator.
The decision follows a bitter dispute between the airport and airlines over what the cap should be.
The charges are paid by the airlines but are usually passed on to passengers in air fares.
Heathrow was allowed to raise its average fee on January 1 from the previous level of £19.60 due to the collapse in passenger numbers caused by the coronavirus pandemic.
But the five-year control period from 2022-2026 announced by the CAA will see that cap reduced to the lower end of the £24.50-£34.40 range it has consulted on.
The CAA said these were its “final proposals”, with a “final decision” expected to be released in the fall.
Heathrow chief executive John Holland-Kaye claimed the regulator “continues to underestimate what it takes to deliver a good service to passengers, both in terms of the level of investment and the cost of exploitation required and fair incentive needed for private investors to finance it”. .
There is “still time for the CAA to get it right”, he said, adding: “Uncorrected, these elements of the CAA’s proposal will only worsen the passenger experience at Heathrow as that investment in the service will dry up.”
CAA chief executive Richard Moriarty said the announcement was “to do the right thing for consumers”.
He insisted the regulator had “listened very carefully” to arguments from Heathrow and the airlines.
“Our independent and unbiased analysis balances affordable burdens for consumers, while enabling Heathrow to make the necessary investments for the future,” he said.
The CAA believes Heathrow will still be able to invest in improvements, such as next-generation security scanners and a £1.3billion upgrade to baggage facilities at Terminal 2.
Heathrow had asked for the cap to vary from £32 to £43.
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