The UK Civil Aviation Authority (CAA) will set a five-year price cap on the maximum charges Heathrow can ask its airline customers for using the airport.
Coming into force in the summer of 2022, the cap is expected set affordable charges for airlines while making sure the airport can get back on track with its post-pandemic recovery.
Consulting the airport as well as airlines, the aviation regulator is working to increase the charge per passenger from £22 to between £24.50 and £34.40, even though the hub had previously asked for an increase between £32 and £43.
“While international air travel is still recovering, setting a price control for Heathrow airport against the backdrop of so much uncertainty means we have had to adapt our approach,” said CAA’s chief executive Richard Moriarty.
“Our principal objective is to further the interests of consumers while recognising the challenges the industry has faced throughout the Covid-19 pandemic.
“These initial proposals seek to protect consumers against unfair charges, and will allow Heathrow to continue to appropriately invest in keeping the airport resilient, efficient and one that provides a good experience for passengers.”
The hub welcomed the discussions, but highlighted the need to reach to a satisfactory settlement with all those involved.
“We provide great value for money which is why airlines generate premium profit margins on their services from our world-class facilities,” said a spokesperson.
“While it is right the CAA protect consumers against excessive profits and waste, the settlement is not designed to shield airlines from legitimate cost increases or the impacts of fewer people travelling.”
The news was not welcomed by airlines such as Virgin Atlantic and British Airways (BA). Virgin Atlantic’s chief executive Shai Weiss said that, by introducing the increased charge, the CAA was failing the British consumer, adding that the company will oppose the proposal.
“The world’s most expensive airport risks becoming over 50 per cent more expensive, as Heathrow and its owners seek to recoup their pandemic losses and secure hundreds of millions in dividends to shareholders,” he said.
“Abusing its unique position as the UK’s only hub airport, Heathrow’s proposed increase of charges will hurt the UK’s economic recovery and unfairly hit the pockets of families and businesses around the nation.
“No other airport in the world is proposing increases on this scale and by becoming unaffordable, competing EU hubs and airlines will benefit.”
Luis Gallego, chief executive of BA’s owner IAG, said: “A cost-efficient Heathrow would benefit travellers, businesses and the UK economy as a whole.
“Airport charges must be competitive if Global Britain is to become a reality.”
The CAA consultations to set the new price cap will run until 17 November.