London’s Heathrow airport has been ordered to reduce its landing charges over the next four years, a proposal that will please airlines while the airport said it would result in a worse experience for passengers.
The move by the Civil Aviation Authority deals a blow to the airport, which had argued for higher fees to help protect customer service, at a time when the travel industry is recovering from the pandemic.
The regulator said the average maximum price for each passenger that airlines will pay Heathrow will fall from £30.19 now to £26.31 in 2026. Excluding the effects of inflation, this is equal to a near-6% reduction every year until then.
The CAA said its final proposals would “be in the best interest of consumers”. It is undertaking a consultation and will announce its final decision later this year.
In a bitter dispute, airlines had pushed for a reduction in landing charges, while Heathrow argued that this would hit customer service. The CAA said the two sides had “starkly divergent views on the level of charges for the next five years”.
The airport’s chief executive, John Holland-Kaye, said: “The CAA continues to underestimate what it takes to deliver a good passenger service, both in terms of the level of investment and operating costs required and the fair incentive needed for private investors to finance it.
“Uncorrected, these elements of the CAA’s proposal will only result in passengers getting a worse experience at Heathrow as investment in service dries up.”
The cap on landing charges was £22 a customer in 2020, but was raised to more than £30 in January.
Richard Moriarty, the CAA chief executive, said: “Today’s announcement is about doing the right thing for consumers. We have listened very carefully to both Heathrow airport and the airlines who have differing views to each other about the future level of charges. Our independent and impartial analysis balances affordable charges for consumers, while allowing Heathrow to make the investment needed for the future.”
The CAA said increased demand for travel 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. Passenger numbers in May were 79% of pre-pandemic levels. However, uncertainties persist into next year, and passenger numbers at Heathrow are not predicted to return to 2019 levels until at least 2025.