Heathrow Airport set to raise passenger charges by 56%

Flight prices in and out of the west London airport could be hiked from summer 2022

Heathrow Airport will be allowed to raise passenger prices from next summer. Edmond Terakopian / AFP

Heathrow Airport will be allowed to raise passenger charges – but not as much as it had hoped for - under new plans as it struggles to recover from the Covid-19 pandemic.

The Civil Aviation Authority (CAA) announced it was consulting on plans to hike the airport’s price per passenger from £22 last year to between £24.50 and £34.40.

The west London airport had called for the cap to be raised to between £32 and £43 for the five-year period being consulted on.

The proposed hike of up to 56 per cent would see passengers at the UK’s busiest airport met with higher price flights as early as summer 2022.

The airport said in July that its losses from the Covid-19 pandemic had hit £2.9 billion.

Despite an increase in demand for travel in recent weeks as many restrictions were lifted, passenger numbers in September were just 38 per cent of pre-pandemic levels.

The CAA, which oversees and regulates all aspects of non-military aviation in the UK, says the exact figures should depend on factors such as demand from travellers and commercial revenue.

It said prices would inevitably be higher if Heathrow continues to struggle in those areas.

The range is planned to come into effect from next summer, with an interim cap of £30 being introduced at the beginning of the year.

The charges are ultimately paid by passengers as airlines add the cost to the price of tickets.

CAA chief executive Richard Moriarty said the group aims to strike a balance between protecting the interests of passengers and appreciating the problems which have hit the industry.

“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,” he said.

“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.”

Earlier this year, the CAA announced that Heathrow would be allowed to raise an additional £300 million from increased charges due to the coronavirus crisis.

On Tuesday the regulator said that it is not planning to adjust this amount. Heathrow had asked last year for the total to be set at £2.6 billion.

Consultations on the interim price cap and the wider proposals will run until November 17 and December 17 respectively.

Responding to the CAA’s announcement, a spokesman for Heathrow said: “Our aim is to reach a settlement that enables us to give passengers a great service while operating a safe, resilient and competitive hub airport for Britain.

“That Heathrow is ranked by passengers as one of the best airports in the world is testament to the power of private investment over the past decade, and to enable this to continue we believe the settlement should safeguard a fair return for investors.

“We provide great value for money, which is why airlines generate premium profit margins on their services from our world-class facilities.

“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.

“We look forward to discussing the CAA’s proposals in detail with the regulator and our airline partners as we work towards a new settlement.”

In recent weeks, Heathrow has been blighted by a series of failures in its e-gates, causing huge queues for passengers.

The United States’ decision to allow fully vaccinated British passengers into the country from November 8 is set to increase demand for travel.

US officials will accept UK proof of vaccination months after Britain began nodding through double-jabbed Americans.

Washington has also said fully vaccinated travellers from EU countries can come to the States.