The Civil Aviation Authority has ordered Heathrow to lower airline passenger fees yearly until 2026.
The regulator claimed that although still allowing the airport to invest, the fee cut reflected the recent uptick in traveler numbers.
However, Heathrow, which wanted the fees increased, said that the action would jeopardize the implementation of crucial enhancements.
The costs are covered by the airlines, but they may be passed on to the travelers in the form of airfare.
The fees are used to maintain the terminals, runways, baggage handling, and security systems.
The average fee per person at Heathrow is currently £30.19, but according to the CAA, this will drop to £26.31 by 2026. Heathrow, though, wished to raise it to £41.95.
According to the CAA, the fee reduction “reflects anticipated increases in passenger numbers as the pandemic recovery progresses and the higher level of the price ceiling in 2022, which was put in place in 2021 to reflect the problems from the epidemic at the time.”
Heathrow was awarded approval to increase the passenger fee from £19.60 to £30.19 in December 2021.
The CAA’s chief executive, Richard Moriarty, stated that the fee reduction was “about doing the right thing for customers.”
The airlines and Heathrow Airport, who have different opinions regarding the amount of costs in the future, have both been attentively listened to, he added.
“Our independent and objective research strikes a compromise between reasonable fees for customers and enabling Heathrow to make the necessary investments for the future.”
The regulator “continues to underestimate what it takes to operate a strong passenger service, both in terms of the degree of investment and operational expenses necessary and the reasonable incentive needed for private investors to finance it,” according to Heathrow CEO John Holland-Kaye.
Without correction, he claimed, the CAA’s plan would simply make Heathrow’s customer experience worse as service investment dried up.
According to Mr. Moriarty, fees might be decreased because of how strong the recovery is, “with more people coming in.”
He said that despite the restriction, Heathrow will still be able to invest £3.6 billion, including in new baggage systems for terminal 2.
Heathrow flight cancellations earlier this month affected 5,000 passengers as a result of the accumulation of luggage due to issues with the baggage system.
According to Mr. Moriarty, the airport has to “lift its game” because of issues with handicapped persons being left on aircraft after other passengers have disembarked. These issues were brought up by BBC security journalist Frank Gardner.
“Everyone in aviation wants to avoid the situations that we’ve seen over the last couple of months when it comes to interruption,” he added.
Recruiting new members into the system is a top priority for everyone, and we’ve put pressure on the airlines to ensure that their itineraries for the upcoming several months are achievable for passengers.
By 2026, the measures, according to him, should reduce the price of a ticket from Heathrow by £4. Currently, the £30.19 fee accounts for around 5% of the price of a typical Heathrow to New York flight.
Virgin Atlantic’s CEO, Shai Weiss, stated that the regulator “can and must go farther to decrease the cap” from its suggestions.
“With a travel recovery in full swing, our joint focus should be on maintaining the greatest experience for customers with reasonable pricing, especially given that consumers are under pressure from rising costs of living and that our country’s aspirations to be a global power are at risk.”
The aviation regulator’s plans are its final recommendations, and a decision on the fees will be made in the fall.
Both the airport and the airlines will have the opportunity to appeal the CAA’s decision to the competition authorities after it has reached its final determination about the charge.