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Heathrow plans passenger fee hike amid £10 billion expansion

Heathrow plans passenger fee hike amid £10 billion expansion
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London Heathrow Airport | Official Website

London Heathrow Airport is planning a significant passenger fee increase as part of its £10 billion expansion project, aimed at accommodating 10 million more passengers by 2031. The average landing fee per passenger is expected to rise to around £33.26 over the next five years, up from the current average of £28.46. Despite the increase, Heathrow claims that these charges are still lower in real terms than they were a decade ago.

Major airlines operating at Heathrow, including British Airways and Virgin Atlantic, have criticized the proposed 17% increase in landing fees. They argue that it is unfair for consumers and carriers to bear the cost of the airport’s expansion project, although they recognize the need for improved customer experience.

The expansion will be delivered through a UK-based supply chain, with 60% of suppliers located outside London and the South East. This initiative aims to boost jobs and businesses nationwide without burdening taxpayers, as it is entirely funded by private investment. A £2 billion equity injection from shareholders is expected to support cost efficiency.

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A spokesperson for Virgin Atlantic commented: “Heathrow says that its shareholders will contribute £2bn equity but it is ultimately consumers and airlines that pay the bill.” They further called for an urgent review of Heathrow’s economic regulatory model by the Civil Aviation Authority (CAA).

The CAA is set to review Heathrow’s expansion proposal, which includes creating space equivalent to 10 football pitches within existing terminals. The plan involves new lounges, shops, restaurants, increased freight capacity by 20%, redevelopment of certain areas, and infrastructure improvements such as extending Terminal 2 and building a new road tunnel.

In light of record passenger traffic in 2024 with over 83 million passengers passing through its terminals, Heathrow's financial figures showed slight declines compared to previous years due to lower airport charges set by CAA.

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