Heathrow airport has once again been told to cut its passenger charges, owing to the recovery of passenger numbers following the pandemic.

The Civil Aviation Authority (CAA) has confirmed its final decision on the so-called H7 settlement, which dictates the annual caps on passenger charges paid by airlines for using the airport until the end of 2026.

The average charge per passenger at Heathrow for 2023 will remain fixed at the £31.57, set out in its interim decision issued earlier this year.

The regulator said this will fall to £25.43 in 2024 and “remain broadly flat at that level” until the end of 2026.

The CAA says that the final decision is based on annual passenger forecasts which expect a return to pre-pandemic levels by 2025, as well as a forecast of 375.5 million passengers between 2022 and 2026.

More than 5.4 million travellers passed through the London hub in January – the airport’s busiest start to the year since 2019.

Richard Moriarty, chief executive at the CAA, explained:

“Our priority in making this decision today is to ensure the travelling public can expect great value for money from using Heathrow in terms of having a consistently good quality of service, whilst paying no more than is needed for it.”

The charges would also allow the airport to invest in next-generation security scanners and a new baggage system in Terminal 2, according to the regulator.

The CAA revealed that the average charge requested by Heathrow was around £40 per passenger, while airlines suggested that the proposed charge should be no more than around £18.50 on average.

Virgin Atlantic CEO, Shai Weiss, who previously described the proposed cap on Heathrow passenger charges as “unacceptable”, has once again criticised the decision, stating that the CAA “has not gone far enough to push back on a monopolistic Heathrow and fulfil its statutory duty to protect customers”.

Weiss added:

“Heathrow has abused its power throughout this process, peddling false narratives and flawed passenger forecasts in an attempt to win an economic argument. This process has proven that the regulatory framework, including the formula used to set charges, is fundamentally broken. We’ll review our position carefully.”

Willie Walsh, director general of IATA (International Air Transport Association), described the CAA as being “hostage to Heathrow’s pessimistic passenger outlook” and that passengers will “continue to pay one of the highest airport charges in the world”.

IATA also tweeted that “the process for LHR’s charges and incentivising performance needs an overhaul”.

Both Heathrow airport and airlines have six weeks to appeal the decision.

heathrow.com ; caa.co.uk