Heathrow given green light to raise landing charges

Heathrow airport will be allowed to raise landing charges next year to compensate for a collapse in passenger numbers, the UK’s aviation regulator said on Thursday, prompting an angry backlash from airlines. The Civil Aviation Authority gave the airport the green light to raise landing fees by 37% to GBP30.19 per passenger from GBP22 from January 1, which will apply for an interim period next year when a longer-term agreement will be decided. The move deepened a bitter row between Heathrow and the airlines, which have warned of higher ticket prices for passengers at an airport that already has some of the highest landing charges in the world. Fees are typically passed straight on to customers. Heathrow also criticised the decision, saying it was based on a flawed analysis with over-optimistic forecasts for passenger numbers. “Uncorrected, this risks leaving Heathrow without sufficient cash flow to support investment in improving passenger service and resilience,” the airport said. The CAA insisted the price rise achieves a balance between protecting customers and allowing Heathrow’s owners to continue to invest in the airport. Heathrow argues that unlike airlines it cannot change its prices to reflect passenger demand, with fixed costs regardless of the number of travellers. Airlines say the landing charges should be cut to stimulate demand, adding that the airport’s owners should cover the losses. Luis Gallego, CE of IAG, the biggest airline group at Heathrow, said the CAA’s ruling was “disappointing”.  “After the worst crisis in aviation history, we need to attract demand to stay competitive. Hiking charges will have the opposite effect. Britain will become not more competitive, but less,” he said. Gallego has threatened to move some of its business away from Heathrow if prices are allowed to rise sharply over the long-term, although analysts said it is inconceivable IAG will give up its most lucrative slots at the airport.<br/>