The UK’s Civil Aviation Authority (CAA) has come under fire following an announcement that it would increase the amount airlines pay to National Air Traffic Services (NATS) in nominal terms from £47 (R1 080) to £64 (R1 470), starting this year until 2027.
The move is intended to help NATS recoup costs incurred during the COVID-19 pandemic, reports reuters.com. In the wake of a technical issue that caused an outage in the air traffic control system in late August, which airlines have said cost them millions of pounds, the news of the increase was not received well.
Industry association Airline UK has said that the increase “simply cannot be justified while it remains unclear what action will be taken to ensure airlines and their customers do not see a repeat of this disruption”.
Following substantial airfare increases due to soaring inflation and fuel costs as airlines scramble to mop up losses post-COVID, the trade body says passengers will invariably take the knock.
“It is clear that a wider independent review into how NATS is regulated is needed to protect passengers and ensure that airlines are not always forced to act as the insurer of last resort and bear millions of pounds of costs for failures that are not their fault.”
Industry response to increases
Heathrow Airport’s CFO, Javier Echave, told Sky News that the increase of £2 (R45) per passenger was justified and reasonable.
“National infrastructure is critical for the success of, for the connectivity, the country… It’s good to hear that the CAA recognises it’s important to invest in service and resilience.”
Meanwhile, the Competition and Markets Authority (CMA) has said that the CAA’s plan to reduce passenger charges at London Heathrow will be upheld, despite backlash from major airlines and the airport.
Airlines submitted appeals saying that the planned cuts were not significant enough and would strain their passengers, while the airport submitted an appeal cautioning that the cuts would have a negative impact on investment.
On Tuesday, October 16, the CMA reviewed the CAA’s decision and confirmed that it agreed with the verdict, although it noted a handful of smaller issues.
“Having considered these appeals, we found that the CAA’s Heathrow price control struck broadly the right balance between ensuring prices for passengers are not too high and encouraging investors to maintain and improve the airport over time,” CMA Group Chairperson, Kirstin Baker, said in a statement.
The CAA’s proposed cuts could mostly alleviate concerns as it could mean a £3,6 billion (R83bn) capital investment for the airport to overhaul Terminal 2’s security features and check-in infrastructure, reported simpleflying.co.za.
However, Virgin Atlantic remained sceptical of the decision and called for a full review of the process used to decide on the price cut amid the CAA and Heathrow’s recent change in leadership. Virgin is possibly seeking a review in the hope that the new management might have a different view from that of the previous management.
“Following more than three years of regulated consultation on Heathrow charges, it’s disappointing that the CMA has largely endorsed the CAA’s decision, which did not go far enough to protect consumers from excessive charges at Heathrow… Heathrow must work collaboratively with airlines to ensure it gets back to its best, so it can deliver a world-class experience commensurate with being the world’s most expensive airport,” said a spokesperson for the airline.
