Heathrow forced to cut landing fees after airline lobbying

Heathrow Airport will be forced to cut its landing fees after demand for flights recovered faster than expected from the pandemic and airlines successfully lobbied against a significant increase in fees.

The UK Aviation Authority said on Wednesday landing fees at the UK hub airport should fall from £31.57 per passenger currently to £25.43 from next year.

The fees are usually passed on directly to the passengers via the ticket prices. Heathrow and the airlines had been at odds for years over whether the airport should be allowed to increase its fees in the wake of the pandemic and the drop in passenger numbers.

Heathrow pushed to be allowed to charge much higher fees – up to £40 per passenger – and warned investment in the airport was at risk.

But in an increasingly acrimonious row, airlines accused the airport of price-gouging and deliberately underestimating the speed of the recovery in its passenger forecasts in an attempt to secure better fare regulation from the regulator.

Senior industry executives have warned the row could continue as Heathrow and the airlines both have six weeks to appeal to the Competition and Markets Authority.

The new rate, released on Wednesday, represents a final decision by the Civil Aviation Authority for pricing over the regulatory period between 2022 and 2026. The CAA had published a number of proposals and intermediate prices over the past two years.

Fees will remain around £25 in 2025 and 2026, the CAA said, averaging £27.49 for the regulatory period, reflecting higher fees in 2022 and 2023.

The regulator last summer had proposed an average fare of £28.39 for the period, including a £26.31 fee until 2026, last year but lowered it after seeing the rapid recovery in passenger numbers amid a macro backdrop, including high inflation.

https://www.ft.com/content/44432f0b-de36-433d-a495-3c09314dc6d7 Heathrow forced to cut landing fees after airline lobbying

Brian Ashcraft

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