Heathrow spin on cutting (by a tiny further amount) its charges for domestic air passengers

Heathrow has put out a rather coy press release, crowing about how it is cutting charges for domestic air passengers. The aim is to encourage more to fly on domestic routes to and from Heathrow. They say they are cutting the charge by £15 per passenger, but carefully avoid giving the current or future figure.  The charge per passenger is probably around £31 now, on domestic or European flights, and will be around £15. But no details are given. Earlier publications by Heathrow indicate they gave a £10 discount last year, so the £15 is only a small increase – but being used to generate positive publicity.  Heathrow knows the Airports Commission believed the number of domestic links to Heathrow would actually fall over time, with a new runway. Heathrow is desperate to get regional politicians to believe the 3rd runway would give them better flights to Heathrow, to get support for the vote in Parliament on the 3rd runway, some time in the first half of 2018. The only way Heathrow can support more domestic flights is by subsidising them, with a route development fund.  How long the airport would be prepared, once it has its runway, to continue the expensive subsidy is anyone’s guess. The subsidy could be seen as anti-competitive, especially with (far lower carbon) rail travel.
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Heathrow cuts domestic airport charges

Heathrow airport has cut £15 from charges for domestic fliers, increasing the existing discount by half.

The airport says the discount will save domestic travellers nearly £40 million annually and is part of a set of measures it is taking to promote flights to UK destinations. It claims that when it expands in 2025, the hub will increase its domestic connections from eight to 14, saying it will create a £10 million fund to provide start-up capital for new UK routes.

Heathrow CEO John Holland-Kaye was a major proponent of calls to cut the short-haul APD in the autumn budget, saying help was needed to “supercharge British competitiveness” and “make it cheaper for British businesses to get to London and beyond”. The airport says it has been an “ardent campaigner” for boosting domestic flights.

Announcing the reduction in airport charges, Holland-Kaye said: “Every corner of our country should be able to benefit from the growth and trade that stems from links to the nation’s hub airport.”

In 2017, the airport agreed to reduce its charges for at least 20 years, working with the Scottish government on the Memorandum of Understanding. Keith Brown, cabinet secretary for economy, jobs and fair work, said the further cut was “welcome news for business and leisure passengers”.

heathrow.com 

https://buyingbusinesstravel.com/news/0428186-heathrow-cuts-domestic-airport-charges

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Heathrow SCHEDULE 5 – Charges effective from 1 July 2014

2. Departing Passenger Charges

2.1 The charge per departing Passenger (other than Transfer Passengers or Transit Passengers) is: European Destinations £31.63 Other Destinations £44.41 2.2 The charge per departing Transfer Passenger or Transit Passenger is: European Destinations £23.72 Other Destinations £33.31 .”

From  https://www.heathrow.com/file_source/Company/Static/PDF/Partnersandsuppliers/HAL-Conditions-of-Use-Amendment-SCHEDULE5-Up_date-25April2014.pdf

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Heathrow said last in 2016 that they would be giving a “£10 passenger discount to UK routes (£5 discount on European routes and £5 UK connectivity discount), compared to the existing European passenger.”

Departing OD Passenger Charge

European charge with dual discount [Dep Pax] £19.13
(with EU load factor and UK connectivity discount)
European charge with single discount [Dep Pax] £24.13
(with EU load factor discount)
Other [Dep Pax] £40.90

so the £15 discount announced now is just £5 more than that.

https://www.heathrow.com/file_source/Company/Static/PDF/Partnersandsuppliers/Heathrow-Airport-Charges-Consultation-Document-2017.pdf

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Heathrow offers bigger discount for UK fliers

4.1.2018 (Heathrow airport press release)

  • Heathrow will shave £15 off airport charges for UK fliers – increasing the airport’s existing domestic discount by 50%
  • Domestic discount introduced to make it cheaper to fly within the UK and boost domestic flights to Heathrow
  • UK passengers set to save nearly £40 million a year and over £750 million over the next 20 years as a result of the discount

UK fliers are set to save even more when flying from Heathrow as the airport announced a 50% increase in the discount for domestic flights. From 1st January 2018, passengers flying to any UK destination from Heathrow will have a £15 discount on the airport charges they pay – the biggest discount in the airport’s history and resulting in savings of nearly £40 million annually and over £750 million over the next 20 years.

Heathrow has been a long-time and ardent campaigner for boosting domestic flights at the UK’s hub and last year committed to keeping a discounted domestic passenger charge for at least the next twenty years as long as it is in the public interest. The further reduction in the domestic passenger charge announced today will save passengers even more money while making domestic routes more commercially viable for airlines – encouraging them to add more domestic services. Heathrow is the UK’s global gateway and largest port – ensuring communities across Britain have convenient, reliable access to the hub is critical for connecting exporters with customers around the world and attracting inward tourism and investment.

The domestic discount is one plank in a package of measures Heathrow is implementing to support more flights to UK destinations – ultimately increasing the airport’s domestic connections from 8 today to at least 14 when the airport expands in 2025. Other measures include creating a £10m fund to provide start-up capital for 5 new domestic routes, urging the Government to use new powers after leaving the EU to ring-fence slots at the airport solely for domestic flights and campaigning for the abolition of air passenger duty on domestic flights to save UK passengers up to £225m annually.

Heathrow CEO John Holland-Kaye said:

“Every corner of our country should be able to benefit from the growth and trade that stems from links to the nation’s hub airport – that’s why Heathrow is making it cheaper to fly within the UK by reducing our domestic passenger charges even further for the second consecutive year. Putting nearly £40 million back into the pockets of British families and businesses each year will help to spur growth in every part of the UK.”

Cabinet Secretary for Economy, Jobs and Fair Work Keith Brown said:

“I’m very pleased to see this further reduction in charges, something the Scottish Government has long advocated in our work with Heathrow Airport.

“The fact the airport is going beyond the reduction agreed in the Memorandum of Understanding with the Scottish Government is welcome news for business and leisure passengers, and will help improve Scotland’s connectivity.”

–Ends–

Notes to Editors:

Heathrow’s UK destinations currently include Aberdeen, Belfast, Edinburgh, Glasgow, Inverness, Leeds Bradford, Manchester and Newcastle. Airlines like easyJet and Flybe have already expressed interest in connecting many new cities to Heathrow, including Liverpool, Dundee and Newquay to Heathrow.

The full changes to Heathrow’s charging regime which will take place from 1st January 2018 are outlined below:

2017 2018
Overall balance Environment 29%

Passenger 67%

Parking 4%

No change
Passenger charge by destination UK

European

Non-European

No change
Passenger charge discounts EU load factor (£5)

UK connectivity (£10)

EU load factor (£10)

UK connectivity (£15)

Transfer passenger charge 25% discount No change
Transit passenger charge Charged as per transfer passengers No change
Basis of landing Movement

 

No change
Noise charge New differentiated Chapter 14 No change
Parking charge Separate free period and charge thereafter for narrow and wide bodied aircraft No change
Minimum Departure Charge All destinations £1,378.08 UK £761.40

All other destinations £1,378.08

Night Quota Period Charges Between 00h00 and 03h29 (local time) Between 23h30 and 06h00 (local time)
Remote Stand Rebate Applied before Minimum Departure Charge Applied after Minimum Departure Charge

 

Heathrow is Europe’s largest airport and one of the world’s top international aviation hubs. As the UK’s global gateway, Heathrow welcomes more than 76 million passengers every year with a commitment to making ‘every journey better’. The airport is home to more than 80 airlines and is Britain’s largest cargo port, helping to drive British trade growth by connecting the nation to more than 190 destinations around the world. Following an investment of more than £11 billion over the last 10 years, Heathrow is currently ranked by passengers as the ‘Best Airport in Western Europe’ for the third year running and the ‘Best Airport for Shopping’ for eight years in a row.

For more information please contact the Heathrow Press Office on 0208 745 7224.

http://mediacentre.heathrow.com/pressrelease/details/81/Corporate-operational-24/9088

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