Heathrow was forced to make a bigger cut in passenger landing fees

After intervention by the competition authority, Heathrow Airport is forced to reduce the landing fees it charges to airlines.

The Civil Aviation Authority (CAA) has announced that the cap on landing charges will be set at £23.73 per passenger next year and £23.71 in 2026, around 6% lower than initially expected.

In March last year, the CAA had proposed capping prices at £25.24 in 2025 and £25.28 in 2026. However, after the Competition and Markets Authority (CMA) stepped into the long-running dispute between Heathrow and the airlines, the CAA makes minor adjustments to the rates. are price ceiling calculations. While the CMA largely supported the CAA’s approach, it recommended re-examining a number of minor issues.

The CAA’s final decision on the price cap concludes the debate over whether Heathrow should increase landing charges during the 2022-2026 regulatory period to aid recovery from the pandemic. Initially, Heathrow tried to charge as much as £40 per passenger, a proposal that airlines claimed was based on underestimating the airport’s recovery speed to justify higher fees. Before the pandemic, the fee was set at around £19 per passenger.

The tension between Heathrow and the airlines stemmed from the significant drop in air travel during the pandemic. However, the sector has recovered quickly. On June 30, Heathrow had its busiest day ever: 268,000 passengers passed through the terminals. In June the airport handled 7.4 million passengers, an increase of 5.6% compared to the same month last year. During the 12 months ending in June, 81.9 million passengers used the airport, an increase of 13% on the previous year.

Last month, ownership of Heathrow changed hands after Ferrovial, the Spanish construction company that led the 2006 takeover of the then privatized BAA, sold most of its stake. The deal was struck with Ardian, former co-owner of Luton Airport, and PIF, Saudi Arabia’s sovereign wealth fund, which also has stakes in Newcastle United and Aston Martin. The original takeover valued Heathrow at £9.5 billion, while the revised settlement carries a price of £8.3 billion, a discount of 13%.