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Heathrow flights may see price rise

Passengers rushing in the airport12/02/13

By Michael Allen

Ticket prices for flights out of Heathrow could rise over the next six years as the airport's bosses seek approval from regulators to raise cash for a £3 billion investment plan.

If the Civil Aviation Authority (CAA) approves the five-year plan the fees Heathrow charges airlines to use the airport will increase between 2014 and 2019.

Currently airlines pay fees equivalent to £19.33 per passenger, but under the plans these could increase to a much as £27.30 by 2018/19.

Heathrow bosses want to be allowed to raise airline charges annually until 2018/19, starting with an increase to £20.78 per passenger in 2013/14. Any increased airline costs are likely to be reflected in higher ticket prices

The increased charges will help pay for £3 billion of investment the airport is planning.

Improvements include opening the new Terminal 2 in 2014, improved check-in and baggage facilities and more customer service training for staff.

Heathrow would also like to increase the number of planes taking off or landing within 15 minutes of schedule to 90% by the end of the decade.

Currently, flight punctuality is 80 per cent and has increased by around a fifth since 2007, when it was 67 per cent.

Since 2007 baggage handling has also improved, with the number of lost bags dropping from 4 per cent to 1.5 per cent, Heathrow bosses said.

Unveiling the investment plans, Heathrow chief executive Colin Matthews said they expect passenger numbers to increase from nearly 70 million now to around 72.6 million by 2018/19.

Heathrow, airlines and the CAA had miscalculated passenger forecasts for the period 2009 to 2014, he admitted.

The CAA had based its ruling on the charges Heathrow could impose on airlines on the assumption that the airport would be handling 78 million passengers a year by 2013.

This error meant the airport had received around £650 million less in charges over the last five years, Mr Matthews said, and it could not recover this money now or in the future.

Discussing the proposals, Mr Matthews said: "Heathrow is the UK's only hub airport and a strategically important national infrastructure asset. Heathrow faces stiff competition from other European hubs and we must continue to improve the service we offer passengers and airlines.

"We have invested billions of pounds in new facilities such as Terminal 5 (T5) in recent years and passengers say they have noticed the difference. Our plan for a further £3 billion of private-sector investment will further improve the airport for passengers.

"The plan represents good value for money for airlines and passengers and comes at no cost to taxpayers."

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