Air Fares: Heathrow Warns Over Charge Ruling
Heathrow has warned of "serious consequences for passengers" after the Civil Aviation Authority (CAA) rejected the airport's demands for inflation-busting increases in the amount it charges airlines.
In its final proposals on charges covering the five years from 2015, the CAA decided they could do not rise by more than the RPI rate of inflation - currently 3.3% - while the Gatwick formula for the same period should be RPI plus 0.5%.
Although for Heathrow this represents an improvement on the RPI minus 1.3% proposed by the CAA earlier this year, the latest figure has angered the airport's chief executive Colin Matthews.
He said: "The CAA's settlement could have serious and far-reaching consequences for passengers and airlines at Heathrow.
"We want to continue to improve Heathrow for passengers.
"Instead, the CAA's proposals risk not only Heathrow's competitive position but the attractiveness of the UK as a centre for international investment.
"We will now carefully consider our investment plans before responding fully to the CAA, he concluded."
The charges are important because in addition to crucial investment cash for airports, they also form part of an airline's calculations on ticket prices.
Virgin Atlantic accused the CAA of bowing to pressure from Heathrow.
Its statement said: "The decision to further increase charges at the airport for the next five years is another hammer blow for both UK consumers and overseas visitors wanting to travel to this country.
"Prices at Heathrow are already triple the level they were 10 years ago and coupled with ever increasing air passenger duty, passengers are facing some of the highest charges in the world and this is deterring inbound tourism and foreign investment."
The Gatwick proposal was given "a cautious welcome" by bosses of the West Sussex airport though easyJet suggested it was a poor deal for passengers.
Chief executive Carolyn McCall said of the proposed increase: "This is based on the airport's proposals and ignores those of the airlines who gave evidence to support a lowering in charges, which would have led to a reduction in fares paid by passengers."
She added that, using Gatwick's own figures, "passengers could be paying £28 more per flight for years in advance of the opening of a new £9bn runway without any real oversight by the CAA".