Ticket prices set to rise as Heathrow able to recover runway project money
Heathrow Airport will be allowed to charge airlines more for its services to recover money spent on the early stages of its third runway project
Heathrow Airport will be allowed to charge airlines more for its services to recover money spent on the early stages of its third runway project. The aviation regulator is permitting the airport to claw back up to £320m through higher airport charges to airlines for each passenger, which is likely to end up being added to ticket prices. A bidder which unsuccessfully put forward a rival design involving a shorter runway, Arora Group's Heathrow West, will also be allowed to recover £4.1m pounds in costs. The Civil Aviation Authority (CAA) and Heathrow said safeguards would be put in place to protect consumers from unjustified costs.
At this stage, the costs being recovered are only for the early planning and design of the runway during 2025 and 2026. Tim Johnson, the CAA's director of consumers and markets, told the BBC: "We've announced that the first tranche of costs, which is to help with the planning of this, can be recovered from passengers. That's up to a maximum of £320m." Heathrow airport will also be able to collect Heathrow West's costs up to November last year by adding to its airport charges. The CAA said allowing these costs to be recouped will result in the maximum airport charge per passenger increasing by around 15 pence in 2028, rising to an estimated 30 pence in the following years.
In November, the government announced it preferred the £33bn scheme put forward by the airport over Arora's alternative plan. At the time, the Department for Transport said Heathrow's own proposal offered the most deliverable option, and the "greatest likelihood" of getting a decision on planning approval within this parliament. The CAA's director of consumers and markets, Tim Johnson, said today's decision "strikes a balance between supporting the delivery of benefits to consumers through timely progress on Heathrow expansion, whilst also protecting them from undue increases in costs". The regulator said "safeguards" designed to monitor cost efficiency would include transparency and cost reporting requirements, and assurance by independent experts.
Airlines often complain that Heathrow is the world's most most expensive hub airport, and have repeatedly voiced concern that the airport's expansion plans will make it pricier. The government hopes for a planning decision by 2029.
The BriefWire