London Heathrow Fees Raising 37% – 56% On January 1, 2022

Passengers traveling to/from/via London’s Heathrow from January 1, 2022, can expect to pay ever-increasing taxes and fees on their airline tickets.

The UK’s Civil Aviation Authority on Thursday apprised an interim price hike of 37% to 56% for the first six months of 2022 that has airlines up in arms, and the airport’s owner HAL is not happy either.

Here’s an excerpt from Financial Times:

This bust-up is only a taster of what’s ahead: regulator the Civil Aviation Authority announced a price cap today of £30.19 per passenger as an interim measure from January until the summer, an increase of 56 per cent or 37 per cent, depending on who you ask, in an industry that can’t even agree what everyone is currently paying.

By mid-next year, it is hoped, the regulator will have figured out the number for the next five-year regulatory period, at which point the difference between that and the interim cap is refunded to the airport or the airlines.

And from the Guardian:

Heathrow’s demands had already caused contention among the airline industry. Willie Walsh, a former chief executive of British Airway’s owner, IAG, who now leads the global airline body Iata, accused the airport of “gouging” its customers.

He called on the UK government to intervene and “remind the CAA of its obligations” to consumers.

The levy is likely to be directly passed on to travellers, as airlines also try to shore up finances after months of travel disruption caused by Covid restrictions.

CAA’s Reasoning:

Download (PDF, 911KB)

Conclusion

London Heathrow was already an expensive airport, and these price hikes make it even less attractive for passengers who have a choice. Most do.

Airlines, airport, and passengers are all unhappy. The owners of the airport, which they have saddled with debt, are happy, however, after pocketing more than £4B in dividends during the good times. So shouldn’t they shore up the finances?