Heathrow blocked from hiking passenger charges to recover Covid losses

The aviation authority has blocked Heathrow Airport’s offer to increase the recovery fees of £ 2.6 billion lost during the coronavirus pandemic.

Paul Smith, Director of the Civil Aviation Administration (CAA), described the plan as “disproportionate and not in the interests of consumers”.

It has allowed the UK’s largest airport to initially raise just another £ 300 million through higher fees after passenger numbers fell to their lowest level since the 1960s.

Only 461,000 people traveled through the airport in February – a decrease of 92 percent from February 2020.

Regarding the extra money Heathrow is looking to get back, the CAA said it will “look further into” this issue during the airport’s next regulatory period, which begins January 1 next year.

Mr Smith said the CAA recognized that “these are exceptional circumstances for the airport and there are potential risks to consumers if we fail to take action in the short term”.

He continued, “The decision we announced today will incentivize and allow Heathrow to maintain investment and quality of service, and to proactively support a possible surge in consumer demand later this year.”

IAG, the parent company of British Airways, the airline that operates most of the flights at the airport, said in a statement it was “extremely disappointed” with the decision, which would “wrongly punish consumers”.

It added, “Heathrow is the world’s most expensive hub airport. For over seven years, Heathrow passengers paid higher airport charges to cover the risk of lower traffic.

“Heathrow shareholders have now made nearly £ 4 billion in dividends. The airport has purposely rewarded its investors at the expense of consumers, and now the regulator is urging passengers to rescue it.

“The CAA’s job is to protect the interests of consumers, not the profits of Heathrow shareholders. Post Brexit, this will make the UK even less competitive and will direct traffic to other airports. We are examining our options.”

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