Heathrow’s plans for hike in passenger charges thwarted as CAA demands a reduction

London Heathrow Airport’s plans to increase passenger charges from £30.19 to £41.95 have been scuppered by the UK Civil Aviation Authority (CAA). Instead, the CAA is demanding that over the next five years passenger charges be incrementally reduced to the point where, by 2026, they have been reduced to £26.31 per passenger.

The charges made by Heathrow go towards the operating costs of terminals, runways, baggage handling systems and security, among others. The CAA has stated that the reduction in the charge “reflects expected increases in passenger numbers as the recovery from the pandemic continues and the higher level of the price cap in 2022, which was put in place in 2021 to reflect the challenges from the pandemic at the time”.

To counteract the financial costs of the COVID-19 pandemic and worldwide travel bans in previous years, Heathrow had been given permission to increase the passenger charge from £19.60 to £30.19, but for this summer only.

Heathrow chief executive John Holland-Kaye said the regulator “continues to underestimate what it takes to deliver 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”. However, the CAA feels that even with this reduction in passenger charges, Heathrow will still be able to invest £3.6bn in the airport, including a new baggage system for Terminal 2.

Currently, the passenger charges at Heathrow are approximately three-times higher than its European counterparts and multiple airlines are calling for these charges to be lowered even further, while Industry body Airlines UK said the Heathrow charges were “still too high”, adding that it was “the most expensive airport in the world”.