Heathrow, Gatwick passengers to enjoy lower prices

Heathrow Airport, where passengers will enjoy 'lower prices and higher service standards', according to the CAA. Picture: Hemedia
Heathrow Airport, where passengers will enjoy 'lower prices and higher service standards', according to the CAA. Picture: Hemedia
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PASSENGERS flying from Heathrow and Gatwick airports will see “lower prices and higher service standards”, the Civil Aviation Authority (CAA) claimed today as it set new controls over how much the UK’s two busiest airports can charge airlines.

The move, from April, means charges will be cut in real terms over the next five years at Heathrow, while the CAA will switch from capping charges at Gatwick to policing the deals the airport strikes with airlines.

The news triggered anger at Heathrow, where charges will be limited to 1.5 per cent below the RPI measure of inflation until 2019.

Heathrow’s per passenger charges to airlines will drop from £20.71 in the year to March to £19.10 in 2018-19 - compared to £25.72 proposed by the airport.

Airport chiefs said the decision would squeeze the income needed for major upgrading work, while at least one major airline - Virgin Atlantic - said it didn’t offset previous charge hikes.

The CAA had signalled in October it would permit charges to increase in line with inflation at Heathrow, but said today passenger traffic forecasts and the cost of capital spending had improved.

The airport has been permitted to increase charges by 7.5 per cent above inflation over the last five years.

Europe’s busiest airport, with some 180 routes, is used by many Scots flying abroad, via British Airways (BA) and Virgin Atlantic flights from Edinburgh and Aberdeen, and BA flights from Glasgow.

At Gatwick, the CAA’s move will see charges to airlines of £8.07 per passenger in 2018-19, when the airport planned to freeze them at the 2014 level of £8.80.

The airport’s 200 routes include EasyJet’s from Edinburgh, Glasgow, Aberdeen and Inverness, and BA’s from Edinburgh and Glasgow. Flybe is axing its Inverness route in March.

CAA chair Dame Deirdre Hutton said: “We have focused on putting the passengers’ interest at the heart of our decisions, and today’s announcement means passengers can look forward to lower prices and high service quality from London’s busiest airports.”

“The airports have benefited from substantial investment over the past decade, which has created world-class facilities for passengers.

“But prices have risen substantially in that time, with service quality sometimes failing to match the standards passengers have every right to expect.”

The CAA said it would license both airports so it could step in if service quality for passengers, such as cleanliness, queuing times, available seating and information, deteriorated.

For the first time, the airports will also be required to have “robust plans” to be better prepared for disruption.

Power cuts at Gatwick on Christmas Eve caused by serious flooding led to severe flight disruption, with chief executive Stewart Wingate admitting to MPs on Tuesday that more “could and should have been done” to help passengers. Snow caused massive disruption at Heathrow in 2010.

Heathrow chief executive Colin Matthews accused the CAA of being “draconian” and said it would now have to see whether its investment plans were “still financeable”.

The airport plans to replace terminal one in about two years’ time after re-opening the new terminal two in June.

Virgin Atlantic said the Heathrow ruling was “a far cry from the reduction needed to mitigate the incredibly steep price rises customers have seen in Heathrow charges in the last few years”.

The airline added that the CAA had “not gone far enough” at Gatwick, saying the passenger experience at Gatwick “can be improved with a more significant reduction in charges”.

British Airways said the CAA had “made a step in the right direction” over Heathrow charges but passengers would still be paying “more than is than is warranted”.

EasyJet, Scotland’s biggest airline, whose main base is Gatwick, said: “It is now up to Gatwick to show this more commercial approach can deliver lower charges and improved service for airlines and their passengers.”

The CAA said Stansted, the UK’s fourth busiest airport with some 140 routes including EasyJet’s from Edinburgh and Glasgow, would no longer be regulated, bringing it into line with all other UK airports.

The regulator said the airport now had long-term contracts with its main airlines, and “does not have substantial market power” - against airlines moving elsewhere.

However, Ryanair, one of its main airlines, said the decision would harm passengers because “Stansted will be able to further increase airport charges whenever it wishes, without any reference to competitive price levels”,