Higher airport charges could mean higher fares

Monday, 02 Dec, 2002 0

Increased airport charges at Heathrow Airport could lead to increased air fares, according to airlines.

The Civil Aviation Authority (CAA) has proposed an increase in the fees that airports in the UK can charge airlines. Fees at Heathrow could rise by as much as 40 percent in five years according to one airline.

In reaction to the proposals, Virgin Atlantic Airways chief executive, Steve Ridgway said: “We are extremely disappointed that the level of charges proposed by the CAA for Heathrow will increase to RPI plus 6.5 percent per year. This means an increase in charges by around 40 percent over the next five years. These increases are wholly unjustified – calculations based on BAA’s own figures show that all of BAA’s capital expenditure including Terminal Five could be funded without any increase in charges. It is difficult to see how the airlines can avoid passing these extra costs onto passengers.”

The CAA’s recommended maximum airport charges to be imposed at Gatwick and Stansted from April 2003, are £4.32 and £4.89 per passenger respectively, which will increase with inflation each year. However, at Heathrow, the CAA has proposed a maximum charge of £6.48 to increase with inflation and increase by 6.5 percent per year for the next five years.

The CAA argues that the charges will help cover the cost of imrpoved airport facilities and airport expansion, in particular, Terminal Five.

A British Airways spokesperson told TravelMole that the carrier was still producing a report in reaction to the CAA proposals, which could total 1,000 pages, but he said: “We are concerned that this increase in charges may lead to extra costs being passed onto the passenger”.

The CAA sets the maximum airport charges every five years. The charges paid by airlines, per passenger in 2001/2002 were: £5.60 at Heathrow, £4.25 at Gatwick and £4.39 at Stansted. The airports are not obliged to set the maximum charge, and the CAA says that Stansted Airport is unlikely to do so because of competitive market conditions.

Following a period of consultation with the industry, the CAA will announce the maximum airport charges for the next five years, in February.