Heathrow Airport must cut its passenger charges after a recovery in demand, the aviation regulator has announced.
The Civil Aviation Authority (CAA) said the cap on the west London airport’s average charge per passenger will reduce beyond previous expectations after a better-than-expected recovery in demand for flights.
The regulator said in its final decision that the charge will reduce from £31.57 for 2023 and last year, to £25.43 over the next three years.
Passengers had been expected to face an average charge of £28.39 in nominal charges over the five-year period to 2026.
The CAA said it has now reduced this average by 90p to £27.49 for the period.
As a result of higher interims charges over 2022 and 2023, passengers will see a substantially lower rate in the following three years to meet this new five-year average.
The CAA has said that Heathrow and airlines will have six weeks from Wednesday to appeal the decision with the Competition and Markets Authority.
The CAA said the cut in charges “recognises that passenger volumes are expected to return to pre-pandemic levels and should benefit passengers in terms of lower costs, while also allowing Heathrow Airport Limited to continue investing in the airport for the benefit of consumers and supporting the airport’s ability to finance its operations”.
But bosses at Heathrow have been highly critical of plans to reduce the proposed landing charges, highlighting significant recent cost inflation.
Last month, the airport operator reported underlying pre-tax losses of £684 million for last year, against losses of £1.3 billion in 2021.
Richard Moriarty, chief executive at the CAA, said: “We have carefully considered the sharply differing views from Heathrow Airport Limited and the airlines about the future level of charges.
“Understandably, their respective shareholder interests lead the airport to argue for higher charges and the airlines to argue for lower charges.
“Our job is to reach an independent decision from these conflicting commercial interests and focus on what is in the best interests for the travelling public that will use Heathrow in the years to come.
“We are confident our final decision represents a good deal for consumers using Heathrow, while having regard for the airport’s need to efficiently finance its operations and be able to invest in improving services for the future,” he added.
