BA and Heathrow launch appeal against changes to London’s airport landing charges

UK Civil Aviation Authority publishes price control decision on NATS airline charges

Following the UK Civil Aviation Authority‘s (CAA) ruling to cut landing fees from London’s Heathrow International Airport, British Airways and Heathrow have lunched an appeal. 

They both launched appeals against the regulator’s decision, along with Delta Airlines and Virgin Atlantic, saying it will “undermine investment” and lead to costly passenger charges (of at least £1.5 billion extra).

The CAA said last month that charges will be fixed at £31.57 per passenger in nominal prices for this year, an inflated rise from £30.19 last summer, then will fall by roughly 20% to £25.43 per passenger in 2024 and will remain broadly flat at that level until the end of 2026.

These charges are generally passed to customers through airline ticket prices.

BA, which with more than half the slots, is the largest holder of take-off and landing slots at the airport, said the overall effect would be an increase in charges, meaning it would be “materially affected” by the increase.

The airlines said the average airport charges payable per passenger by BA, Virgin Atlantic and Delta customers would increase to an average of £23.22 per passenger, from £19.95.

Speaking to CAA in its appeal, the airline said it has identified “errors” resulting in an extra £513 million in passenger charges, with a cumulative “materiality” of around £1.5 billion over the five-year regulatory period, it argued.

Commenting to CAA, they remarked that errors would include setting the passenger forecast too low, failing to review or reduce a £300 million upward adjustment to the regulated asset base of Heathrow, and errors in setting the weighted average cost of capital for the period too high.

Virgin Atlantic is the second largest individual holder of slots at Heathrow, with more than 40 aircraft and 19,000 flights carrying around four million passengers in 2022.