BA threatens to cut Heathrow flights over airport fee rise

Luis Gallego, head of BA parent International Airlines Group, said the proposed increases would drive business away at a time when the industry is trying to boost demand.

In October, the Civil Aviation Authority (CAA) said it wanted to lift the cap on the airport’s average charge per passenger by up to 76%, from the current level of £19.60 to between £24.50 and £34.40.

Gallego told the Airlines 2021 conference in London that Heathrow’s fees are already among the highest in the world and are becoming “more and more expensive”, adding that “we need to attract demand to stay competitive”.

He said two out of five people passing through the airport are taking connecting flights, and “could easily go by other, more competitive hubs”.

“Hiking charges will not help. It will not attract demand – it will have the opposite effect. If the rise in landing charges goes ahead, I know IAG will not be alone in reconsidering our airlines’ use of Heathrow,” he was quoted as saying by the Press Association agency

Gallego’s predecessor, Willie Walsh, told the audience that the UK’s aviation sector risks “shooting everybody in the foot” by allowing Heathrow to hike charges, as passengers “have an option to go somewhere else”.

“You can make a strong case that not only should airport charges not go up, but in fact I think you could argue that they could come down and Heathrow could continue to be fully financed,” said Walsh, who is now director-general of airline trade body the International Air Transport Association.

In response, Heathrow hit back, with a spokesperson saying passengers “know when they’re getting a raw deal” as she claimed the proposed increase in charges of up to £15 is “not comparable” with airlines charging “over £2,000” for economy class air fares on US flights over Christmas.

“It’s true that Heathrow is proposing a higher pandemic price increase than continental airports, but we are neither state-owned nor have we received billions in state aid during the crisis – we rely entirely on private investment.”

Heathrow’s owners include sovereign wealth funds from China and Qatar, Spanish construction firm Ferrovial and large infrastructure funds.

The range is planned to come in effect from summer 2022, with an interim cap of £30 being introduced on January 1.

Charges are paid by airlines but are generally passed on to passengers in air fares.

Heathrow last month said its losses from the Covid-19 pandemic had hit £3.4bn, while passenger numbers in October were 56% down on pre-pandemic levels.