The UK CAA has ordered London Heathrow to reduce airline charges by 20% for two years from 2024.
According to Travel Weekly, the aviation regulator has ruled that Heathrow’s charges per passenger can remain at £31,57 (R700) for this year, but must be reduced to £25,43 (R564) from next year.
This cap will remain in place until the end of 2026, and it will mean the average charge over the next five years will be £27,49 (R610).
The lower charges come as passenger volumes are expected to return to pre-COVID levels in 2024, and should benefit both the airport and the passengers travelling via the airport.
“We are confident our final decision represents a good deal for consumers using Heathrow, while having regard for the airport’s need to efficiently finance its operations and be able to invest in improving services for the future,” said CAA Chief Executive, Richard Moriarty.
Last year, Heathrow hit back at the CAA for wanting to reduce the charges, with Heathrow CEO John Holland-Kaye saying the regulator underestimated what was required to deliver good passenger service both in investment and in operating costs.
However, airlines accused the airport of price gouging, claiming that Heathrow had over-estimated its future operating costs and underestimated its commercial revenues by millions.
According to The Guardian, the CAA’s recent decision to lower the charges by 20% comes after airlines convinced it to reassess its previous proposal to reduce the charges by 6% each year.
It also comes after Heathrow pushed for an increase of more than £40 (R887) per passenger, with the airport saying it may appeal the latest changes, while warning that the CAA’s decision would disadvantage the airport and fail to benefit travellers.
“The CAA has chosen to cut airport charges to their lowest real-terms level in a decade at a time when airlines are making massive profits and Heathrow remains loss-making because of fewer passengers and higher financing costs,” a Heathrow spokesperson said in statement. “This makes no sense and will do nothing for consumers at a time when the CAA should be incentivising investment to rebuild service. We will now take some time to carefully consider our next steps.”
