Airlines have reacted angrily to today’s announcement over charges at Heathrow and Gatwick airports.
The Civil Aviation Authority had previously announced proposals to cap Heathrow charges at the RPI rate of inflation, minus 1.3%, but today it announced it will allow Heathrow to increase charges at the same rate as inflation for five years.
"Airline CEOs will be reaching for their oxygen masks in the knowledge that they will be forced to pass on excessive airport charges to their customers for the next five years," said Dale Keller, chief executive of airline representation group BAR UK.
"Consumers have benefitted from intense competition between airlines, driven by major efficiency gains and razor thin margins.
"Yet the CAA’s new primary duty to consumers has failed its test flight by instead rewarding operating inefficiencies and excessive shareholder returns at the monopoly that is Heathrow.
"Following increases exceeding 300% over the past 11 years, the latest settlement allowing further RPI increases escalates costs to consumers and weakens the international competitiveness of the UK’s only hub airport."
BAR UK was also critical, but less so, of the CAA’s decision to cap Gatwick’s charges at RPI plus 0.5% per year for seven years, a rate proposed by the airport itself.
The airline group said it was concerned the proposed price commitments may not go far enough to protect consumers from profiteering.
"Airlines and their customers expect the government to apply the same economic reality they encounter every day to regulated airport charges, and its own air passenger duty, by calling time on some of the highest air ticket charges in the world," said Keller.
Simon Buck, chief executive of the British Air Transport Association (BATA), said airlines are deeply frustrated and disappointed with the final proposals for consultation.
"BATA supports improving the passenger experience and we believe this can be done without a repeat of the incredibly steep price rises we have seen in airport charges in the last few years," he said.
"The CAA must use the final consultation period to review and rectify its decision and properly fulfil its duty to the consumer."
Virgin Atlantic issued its own statement, saying today’s decision to further increase charges at Heathrow for the next five years is another hammer blow for both UK consumers and overseas visitors.
"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," it said.
But Heathrow chief executive Colin Matthews said the cap was the toughest the airport has ever faced and warned it could have "serious and far-reaching consequences" for passengers and airlines at Heathrow.
Consultation on the CAA’s final proposals for each airport will run until November 4.
