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UK's aviation regulator caps Heathrow plan to charge higher fees

Credit: REUTERS/PETER NICHOLLS

Britain's aviation regulator said that Heathrow, the country's busiest airport, would not be permitted to increase passenger charges as much as it had wanted, as the hub and its airlines vie against each other to recover pandemic losses.

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LONDON, Oct 19 (Reuters) - Britain's aviation regulator said that Heathrow, the country's busiest airport, would not be permitted to increase passenger charges as much as it had wanted, as the hub and its airlines vie against each other to recover pandemic losses.

COVID-19 has restricted flying for over 18 months, putting huge financial strain on Heathrow and the airlines that use it, including its biggest customer British Airways ICAG.L, and making airport charges the subject of a bitter row.

The Civil Aviation Authority said in its initial proposals on Tuesday that Heathrow could raise its per passenger charge to between 24.50 pounds and 34.40 pounds. Heathrow had requested the cap be set at between 32 pounds to 43 pounds.

In 2020, the charge was 22 pounds per passenger.

Heathrow wants to be able to charge more to help recover its losses, but airlines don't want to have to raise ticket prices to cover higher airport charges just when they are trying to stimulate passenger demand for their own recovery.

The CAA said its proposals, which will be finalised next year, struck the right balance between consumer interests and the airport.

There would also be no additional adjustment to Heathrow's regulatory asset base, something which Heathrow had requested, the CAA said, as it also outlined plans for introducing a new risk sharing mechanism to prevent either the airport or the consumer bearing all the risk of future uncertainty.

"These initial proposals seek to protect consumers against unfair charges, and will allow Heathrow to continue to appropriately invest in keeping the airport resilient," the CAA's Chief Executive Richard Moriarty said in a statement.

(Reporting by Sarah Young; Editing by Kate Holton)

((sarah.young@thomsonreuters.com; +44 20 7542 1109; Reuters Messaging: sarah.young.thomsonreuters@reuters.net))

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