Have Heathrow’s airline charges spiralled out of control? Virgin and Delta think so

Mar 18, 2022

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

As one of the world’s busiest travel hubs, few places have felt the financial bite of COVID-19 quite like London’s Heathrow Airport – and it’s now looking to recoup its losses by hitting you in the pocket.

In January, the Civil Aviation Authority (CAA) gave Heathrow permission to raise the price per passenger up from £19.60 to £30.19, with a view to increasing that cap further for the next five years to 2027.

Sign up for our daily newsletter for more TPG news delivered each morning to your inbox.

That’s right, for all the soppy montages during the end credits of Love Actually, the U.K.’s biggest airport can actually sometimes a bit of a hard and cynical place, with shareholders to please and dividends to pay. Make no mistake, either – while the airlines pay the airport, these charges are always passed down to passengers as taxes and charges on the final price of your ticket.

Passengers wait at check-in desks in the departures hall in Terminal 5 at London Heathrow Airport in London, U.K., on Monday, May 17, 2021 (Photo by Jason Alden/Bloomberg via Getty Images)


But the heads of the airlines are at least trying to have your back and are giving Heathrow both barrels, warning that its “egregious” increases might have the effect of putting air travellers off using the airport altogether.

“The 56% increase the CAA has given Heathrow is way, way too high,” said Virgin Atlantic’s Chief Exec Shai Weiss this week. “It’s unwarranted. The charges are egregious. The CAA’s job is to protect consumers. We’re making our case on behalf of consumers. We’ve not given up.”

His thoughts were echoed by Ed Bastian, President and Chief Executive of Delta Air Lines, Virgin Atlantic’s part-owner: “Heathrow is a very expensive airport. We’re an industry coming off a very difficult time. Charges seen as extreme are not helpful. Customers have choices. Are Heathrow’s charges deterring people from coming to London? Potentially.”

Related: ‘What are ghost flights and why are they causing so much uproar right now?’

It’s not the first time Heathrow has come in for criticism for these recent price hikes. After CAA’s announcement last December, British Airways boss Luis Gallego said he was “disappointed” by the charges, pointing out that Heathrow was “already 44% more expensive than its European competitors.”

(Photo by Hollie Adams/Getty Images)

 

“After the worst crisis in aviation history we need to attract demand to stay competitive,” he added. “Hiking charges will have the opposite effect. Britain will become not more competitive, but less. A cost-efficient Heathrow would benefit UK consumers, businesses and trade.”

An extra £15 here? An extra tenner there? It all adds up. Who knows, perhaps industry pressure from the likes of Weiss, who suggested the latest hike could see passengers fly via alternative locations such as Amsterdam Schiphol and Paris Charles de Gaulle, could keep further price rises at bay. But don’t count on it.

The only saving grace this time around is that Heathrow — whose owners include sovereign wealth funds from China and Qatar — didn’t get their original wish, having originally pushed for the cap to range from £32 to £43. “There are material and basic errors in many aspects of the CAA’s assessment,” bemoaned one Heathrow spokesman at the time. “Uncorrected, this risks leaving Heathrow without sufficient cash flow to support investment in improving passenger service and resilience.”

Featured image by

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.