The Civil Aviation Authority has instructed Heathrow to lower airline passenger fees yearly until 2026.
The regulator claimed that while the fees had been reduced, the airport would still be able to make investments because of the recent uptick in traveler numbers.
However, Heathrow, which wanted the fees increased, said that the action would jeopardize the implementation of important enhancements.
Although airlines are responsible for paying the fees, they may be passed through to travelers in the form of airfare.
The fees are used to operate the terminals, runways, baggage handling, and security systems.
The average fee per person at Heathrow is currently £30.19, but according to the CAA, this will drop to £26.31 by 2026. Heathrow, though, wished to raise it to £41.95.
According to the CAA, the fee reduction “reflects anticipated increases in passenger numbers as the pandemic recovery continues and the higher level of the price cap in 2022, which was put in place in 2021 to reflect the problems from the epidemic at the time.”
Heathrow was awarded approval to increase the passenger fee from £19.60 to £30.19 in December 2021.
The aviation regulator’s plans are its final recommendations, and a decision on the fees will be made in the fall.
The CAA’s chief executive, Richard Moriarty, stated that the fee reduction “is about doing the right thing for consumers.”
The airlines and Heathrow Airport, who have different opinions regarding the level of costs in the future, have both been carefully listened to, he added.
“Our independent and objective research strikes a compromise between reasonable fees for customers and enabling Heathrow to make the necessary investments for the future.”
According to Mr. Moriarty, fees could be decreased because of how strong the recovery is, “with more passengers coming in.”
He said that despite the cap, Heathrow would still be able to invest £3.6 billion, including in new baggage systems for terminal 2.
Heathrow flight cancellations earlier this month affected 5,000 passengers as a result of the accumulation of luggage due to issues with the baggage system.
According to Mr. Moriarty, the airport needs to “lift its game” because of issues with disabled persons being left on aircraft after other passengers have disembarked. These issues were brought up by BBC security journalist Frank Gardner.
Everyone in aviation is working extremely hard to recruit new members into the system, and we’ve also put pressure on the airlines to ensure that their schedules over the next few months are deliverable for the passenger, he continued. “When it comes to disruption, everyone in aviation wants to avoid the scenes that we’ve seen over the last couple of months,” he said.
The regulator “continues to underestimate what it takes to operate a strong passenger service, both in terms of the degree of investment and operational costs required and the fair incentive needed for private investors to finance it,” according to Heathrow CEO John Holland-Kaye.
Without correction, he claimed, the CAA’s proposal would simply make Heathrow’s customer experience worse as service investment dried up.