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Heathrow in dogfight with airlines over plans to double airport charges

·3-min read
Plane
Plane

Heathrow airport is locked in a dogfight with airlines over plans to almost double passenger charges as it grapples with one of the biggest debt piles in British corporate history.

Leaked proposals, seen by The Telegraph, reveal that long-haul charges will rocket from £38.33 per traveller this year to £67.86 in 2022.

Virgin Atlantic said the increase - along with a rise in other bills - would cost a family of four flying to Florida an additional £200.

Former British Airways boss Willie Walsh, now head of industry body Iata, said: “We’ve heard that inflation is coming back, but that is ridiculous.

“It is outrageous that Heathrow’s shareholders are seeking to recoup Covid losses at the expense of their airline customers. The UK’s air connectivity is the slowest-recovering in Europe and it cannot afford to be set back by even higher charges.”

Heathrow has been hit hard by a combination of the UK’s maligned “traffic light” Covid border system, and gross debts of almost £20bn.

With the airport expecting to welcome fewer passengers in 2022 than this year - roughly a quarter of the 81m in 2019 - bosses have had to ask lenders for waivers on the airport’s banking conditions to avoid defaulting on its loans.

A spokesman for the airport said: “Unfortunately, with fewer people travelling as a result of Covid, we now have no choice but to increase prices to keep the airport operating safely and efficiently.”

British Airways, Heathrow’s biggest customer, is also understood to have been left fuming by the airport’s plans to introduce a new “super low” noise level that cannot even be achieved by its fleet of the latest Airbus A321Neo jets.

It means that the UK’s flag carrier will be unable to access bigger discounts and forcing overall costs for short-haul flights up by more than 40pc.

While BA declined to comment on the proposals, a spokesman for trade body Airlines UK said: “Heathrow’s proposed charges will have a detrimental impact on consumers – the majority of whom have been prevented from travelling for the last 18 months - and the post-Covid recovery of the entire aviation industry.”

Heathrow’s plans also include a new levy on cargo, which has provided a lifeline revenue stream for many airlines after their passenger services were grounded by Covid restrictions.

Corneel Koster, Virgin Atlantic chief operating officer, said: “A new cargo levy - that would effectively be a tax on trade.”

Heathrow's boss, John Holland-Kaye, has previously claimed that the airport would “supercharge the Government’s 'global Britain’ ambitions” by being a cornerstone of the country’s trade post-Brexit.

Mr Walsh said: “This cynical move by Heathrow highlights the hypocrisy of their claims.”

The prospect of increased charges will increase the cost of a holiday for many Britons seeking to escape after months stuck at home because of more stringent travel requirements than those on the European Continent.

Earlier this month Ryanair boss Michael O’Leary warned that holiday prices are likely to rise sharply next year as fewer flights, inflation and higher taxes drive fares up.

The new price regime also risks deterring holidaymakers less than 48 hours after the Government's controversial traffic light scheme was abolished.

The industry is now seeking support from the Civil Aviation Authority, which determines the overall level of profit that Heathrow can make under a complex regulatory framework.

Sources said that the regulator will announce its own proposals within the next few weeks. Industry insiders suggested that this could scupper Heathrow’s pricing plan.

A spokesman for Heathrow said: “We’re currently consulting with airlines and we welcome their feedback. We have reduced our prices by over 16pc during the past seven years, providing excellent value for money.

“Our proposal is balanced and represents an increase of around 4pc to average ticket prices. The proposed changes will stem current losses and ensure we can deliver the level of service and reliability that our passengers and airlines expect.”

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