London Heathrow Airport in the UK is planning to invest in upgrades to its facilities that could ultimately impact on passengers’ ticket prices.
According to a Reuters report, the airport’s operator, Heathrow Ltd, which was known until recently as BAA, announced today that it is seeking permission from the UK’s Civil Aviation Authority (CAA) to increase its charges to airlines to use the airport between the years 2014 and 2019. This is to help fund a £3bn, five-year investment plan that includes next year’s opening of the airport’s new Terminal 2, upgraded check-in and baggage facilities, and the development of new stands and taxiways to facilitate the latest aircraft.
The CAA will announce its decision on the proposals in January next year, and a positive decision will see an average per passenger increase in the airlines charges from the current £19.33, to £27.30 by 2018/19. The increase would almost certainly be passed on to passengers, although Heathrow authorities insist that passengers would also see a benefit from the improved facilities.
Colin Matthews, Heathrow’s chief executive, was quoted in the Reuters report, saying, ‘Heathrow faces stiff competition from other European hubs and we must continue to improve the service we offers passengers and airlines.’
However, British Airways and Virgin Atlantic, two of the airport’s largest carriers, insist that the facility could be improved without the need to pass on costs to airlines and passengers, with Steve Griffiths, Virgin Atlantic’s chief operating officer, also quoted in the report as saying, ‘In the current economic climate other businesses, in private and public sectors and especially airlines, are making savings and delivering on less money. Airports should not be exempt from that.’
