London Heathrow Airport has been ordered to reduce its landing fares over the next four years, a proposal that will appeal to airlines, while the airport said it would result in a worse experience for to passengers.
The measure by the Civil Aviation Authority is a blow to the airport, which had called for higher fares to help protect customer service, at a time when the travel industry is recovering from the pandemic.
The regulator said the maximum average price for each passenger to be paid by airlines at Heathrow will drop from £ 30.19 now to £ 26.31 in 2026. Excluding the effects of inflation, this equates to a reduction of almost the 6% every year until then.
The CAA said its final proposals “will go in the best interest of consumers”. It is conducting a consultation and will announce its final decision by the end of the year.
In a bitter dispute, airlines had pushed for a reduction in landing fares, while Heathrow argued that this would affect customer service. The CAA said the two sides had “very divergent views on the level of charges for the next five years.”
Airport Executive Director John Holland-Kaye said: “The CAA continues to underestimate what is needed to provide good passenger service, both in terms of the level of investment and operational costs required and the ‘fair incentive needed for private investors to finance.
“Uncorrected, these elements of the CAA proposal will only cause passengers to have a worse experience at Heathrow as the investment in service dries up.”
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The landing cost limit was £ 22 per customer in 2020, but was raised to more than £ 30 in January.
Richard Moriarty, CEO of CAA, said: “Today’s announcement is about doing the right thing for consumers. We’ve listened very carefully to both Heathrow Airport and the airlines that have different opinions about each other. on the future level of charges. Our independent and unbiased analysis balances affordable costs for consumers, while allowing Heathrow to make the necessary investment for the future. “
The CAA said the increase in travel demand was expected to result in a sustained recovery in aviation over the next four years, noting that there had been “sharp increases” in travel in the spring. after UK and international travel restrictions were relaxed. The number of passengers in May was 79% of pre-pandemic levels. However, uncertainties persist next year and the number of passengers at Heathrow is not expected to return to 2019 levels until at least 2025.