Heathrow to lower passenger charges to feed through to the ticket prices

Heathrow Airport, the U.K.’s leading international airport, has reportedly been advised to reduce passenger costs for airlines next year, as they would have an impact on ticket pricing.

The Civil Aviation Authority (CAA) determined that lower fees were necessary as the number of passengers was rebounding more quickly after the pandemic high.

Apparently, the airlines are responsible for paying the expenditures associated with runways, terminals, security, and baggage systems.

Heathrow's average passenger charge for this year is £31.57 ($37.44).

The regulator, however, estimated that this will drop to £25.43 ($30.16) in 2024 and stay broadly stable through the end of 2026.

Although the fees are paid by the airlines, they may have an impact on ticket costs if airlines choose to transfer certain expenses onto the customers through airfare.

According to reports, Heathrow management wanted the charges to be increased to over £40 ($47.43), but the airlines suggested they only go up to about £18.50 ($21.94).

In response to the severe blows delivered to the sector during the Covid-19 outbreak, the airport claimed that the watchdog should be incentivizing investments to reestablish aviation services.

However, the CAA claimed that in deciding to cut fees beginning in 2024, it took into account that pre-pandemic passenger levels would be reached.

It stated that, in addition to saving the passengers money, the charges will allow Heathrow to keep investing in its services, such as planned changes to security scans as well as a new luggage system at Terminal 2.

Heathrow was granted permission in 2021 to hike the airline passenger fee from £19.60 ($23.24) to £30.19 ($35.80) for the summer of last year. The goal was to assist it in surviving the pandemic.

Yet, Virgin Atlantic and British Airways, two of Heathrow's main airlines, have long argued that the airport's costs are the most expensive in the world.

Source credit: https://www.bbc.com/news/business-64885252