Airlines attack decision to allow Heathrow to raise charges by 50%
Rob GillAirlines have accused Heathrow of “abusing” the price cap system after the CAA confirmed the airport can raise charges to carriers by 50% from January.
The CAA will allow Heathrow to charge £30.19 per passenger from 1 January – up from the current charge of £19.60 – as an “interim measure” before new arrangements are put in place. This increased charge is expected to lead to higher airfares.
The airport’s current price control regime expires on 31 December and a new five-year control period will not be implemented until summer 2022.
“This value is in line with our consultation and reflects the uncertainty of the recovery of passenger volumes at the airport from the pandemic, particularly following the emergence of new information about the Omicron variant of Covid-19 since the end of the consultation period,” said the CAA in a statement justifying the interim price cap.
But Tim Alderslade, chief executive of Airlines UK, which represents UK-registered carriers, said: “The CAA has a statutory responsibility to protect consumers and if it thinks a 50% increase in passenger charges at the world’s most expensive airport is the way to do this, then something has gone very wrong.
“Heathrow is behaving as if it’s the only company to be adversely hit by Covid. Airlines have taken on billions of pounds in debt to stem their losses – with their shareholders, not passengers – footing the bill.
“Meanwhile, Heathrow’s wealthy shareholders have taken out more than £100 million in dividends without investing a penny of new equity.
“The CAA should be preventing, rather than endorsing, this monopolistic behaviour – allowing Heathrow to abuse the system by getting airlines and consumers to bail them out.”
Heathrow said it was “extremely disappointed” by the CAA’s interim decision on the level of charges and added that it would “undermine passenger experience at the UK’s hub airport”.
“There are material and basic errors in many aspects of the CAA’s assessment,” said a spokesperson for the airport. “Uncorrected, this risks leaving Heathrow without sufficient cashflow to support investment in improving passenger service and resilience.
“The decision by the CAA differs materially from the forecast assumed in our investor report published last week. We will analyse the impact and consider whether issuing an update in January is necessary.
“We are making a detailed submission to the CAA and expect a more considered outcome when it makes its final decision in spring 2022.”
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