Heathrow: CAA confirms airline price cap and £3.6bn investment in passenger security and new baggage systems
The UK Civil Aviation Authority (CAA) has confirmed that the cap on how much Heathrow Airport can charge airlines will remain fixed at the level set earlier this year.
The UK Civil Aviation Authority published its final decision for the annual caps that will apply to the charges that Heathrow Airport Limited levies on airlines for using the airport until the end of 2026.
The regulator has confirmed that charges for 2023 will remain fixed at the level set out in its interim decision issued earlier this year.
The average maximum price per passenger will then fall by about 20 per cent from £31.57 per passenger in 2023 to £25.43 per passenger in 2024 and will remain at that level until the end of 2026.
This means the average charge over the five years will be £27.49 compared to £28.39 outlined in its earlier proposals.
The CAA said the lower level of charges from 2024 recognised that passenger volumes were expected to return to pre-pandemic levels and should benefit passengers in terms of lower costs, while also allowing Heathrow to continue investing in the airport for the benefit of consumers and supporting the airport’s ability to finance its operations.
The package includes a £3.6bn capital investment programme which will include the installation of next generation security scanners and a new baggage system in Terminal 2.
These are collectively expected to cost around £1.3bn and the CAA said they should bring considerable passenger benefits, including an improved security experience and more resilient infrastructure.
Heathrow passenger cap
Richard Moriarty, chief executive at the UK Civil Aviation Authority, said: “Our priority in making this decision today is to ensure the travelling public can expect great value for money from using Heathrow in terms of having a consistently good quality of service, whilst paying no more than is needed for it.
“We have carefully considered the sharply differing views from Heathrow Airport Limited and the airlines about the future level of charges. Understandably, their respective shareholder interests lead the airport to argue for higher charges and the airlines to argue for lower charges.
“Our job is to reach an independent decision from these conflicting commercial interests and focus on what is in the best interests for the travelling public that will use Heathrow in the years to come. In doing so we have taken all the points made by Heathrow Airport and airlines into account, along with extensive consultation and our own detailed analysis.
“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”.