Heathrow Airport has been forced to cut the landing fees it charges airlines after the competition regulator intervened.
The Civil Aviation Authority has announced that the maximum landing fee will be set at around £23.73 per passenger next year and £23.71 in 2026, about 6% lower than initially expected.
In March last year, the CAA proposed a price cap of £25.24 in 2025 and £25.28 in 2026. However, following the Competition and Markets Authority’s intervention in the protracted dispute between Heathrow and the airlines, the CAA made minor changes to the price cap calculations. While the CAA largely supported the CAA’s approach, it recommended that some minor issues be reconsidered.
The CAA’s final decision on the price cap concludes the debate over whether Heathrow should increase landing fees during the 2022-26 regulatory period to help its recovery from the pandemic. Heathrow initially sought to charge up to £40 per passenger, a proposal that airlines claimed was based on underestimating the speed of the airport’s recovery to justify the higher fee. Before the pandemic, the fee was set at around £19 per passenger.
Tensions between Heathrow and airlines have arisen from the dramatic drop in air travel during the pandemic. However, the industry has quickly rebounded. On June 30, Heathrow saw its busiest day ever, with 268,000 passengers passing through its terminals. In June, the airport handled 7.4 million passengers, up 5.6% on the same month last year. Over the 12 months to June, 81.9 million passengers used the airport, up 13% on the previous year.
Last month, Heathrow changed hands after Ferrovial, the Spanish construction company that led the 2006 takeover of the then-privatised BAA, sold most of its stake. The deal was struck with Ardian, the former co-owner of Luton Airport, and the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, which also has interests in Newcastle United and Aston Martin. The original takeover valued Heathrow at £9.5bn, while the revised settlement comes in at £8.3bn, a 13% discount.
