UK. London Heathrow Airport has signed a major deal on airport charges that it claimed would boost passenger traffic and release funds for investment in the years ahead. Heathrow said the agreement was valued at “hundreds of millions of pounds”.
Under the agreement, Heathrow will establish a new growth incentive to encourage airlines to increase passenger numbers at the airport ahead of its planned next phase of expansion.
Airlines at Heathrow currently operate with average load factors below the IATA global average. If they reach global averages for filling aircraft there is an opportunity to reduce passenger charges by 10-20%.
With more passengers on each existing flight, Heathrow said it would be able to spread the development costs of expansion across a larger passenger base – helping to keep airport charges close to 2016 levels in real terms throughout expansion.
The UK Civil Aviation Authority (CAA) has supported the negotiation of the commercial arrangement and is expected to launch a public consultation on the solution in the coming weeks.
If the CAA gives final approval to the commercial arrangement, the current regulatory settlement would be extended until December 2021.
Heathrow CEO John Holland-Kaye said: “Over the past several months we’ve been working hard with our airline partners to agree a deal on airport charges to 2021. We are delighted that the result is the first-ever commercial agreement at Heathrow which will unlock hundreds of millions of pounds of potential investment for our passengers. We’ve shown that we can achieve more by working together and we will continue working to build on this momentum as we expand.”
