Heathrow adding a new £8.90 per passenger pandemic tax from April
Heathrow has added a new charge on all outbound flights from April. It will charge £8.90 extra in what the airport is calling a United Kingdom Exceptional Regulatory Charge. It may only last for a year, and Heathrow says the CAA has approved it. Other major UK airports have said they will not be implementing a similar fee. Paul McGuinness, chair of the No Third Runway Coalition, criticised the airport for adding on the extra charge. “Yes, aviation has dipped during the pandemic, but it’s the shambolic financial management of Heathrow – the massive borrowing, the large dividends payments to its foreign owners and the total lack of reserves – that is forcing the airport’s management into trying, by stealth, to raise these passenger tariffs.” A Heathrow spokesperson said: “Heathrow makes absolutely zero profit from these services [sic]. The price is calculated purely to cover the cost of operating and maintaining the infrastructure that supports them.” Airlines say the reason for the increase is the amount it charges them for baggage handling, water, electricity and other services. It is possible the tiny extra charge will make some people choose another airport to fly from (but it is probably too low to do that).
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Heathrow’s new pandemic tax pushes up flight prices
28.2.2021
By Stefan Boscia (City AM)
It comes after Heathrow posted a £2bn annual loss earlier this week, with chief executive John Holland-Kaye calling it the “toughest year by far” in the airport’s 75-year history.
Heathrow Airport has added a new charge on all outbound flights in a move that will make flights more expensive.
The airport will be charging £8.90 extra to all outbound flights from April in what the airport is calling a United Kingdom Exceptional Regulatory Charge.
It comes after Heathrow posted a £2bn annual loss earlier this week, with chief executive John Holland-Kaye calling it the “toughest year by far” in the airport’s 75-year history.
The new charge, which was first reported by the Sunday Times, would increase airfares for a family of four by almost £50.
Other major UK airports have said they will not be implementing a similar fee.
Paul McGuinness, chair of the No Third Runway Coalition, criticised the airport for adding on the extra charge.
“Yes, aviation has dipped during the pandemic, but it’s the shambolic financial management of Heathrow – the massive borrowing, the large dividends payments to its foreign owners and the total lack of reserves – that is forcing the airport’s management into trying, by stealth, to raise these passenger tariffs,” he said.
A Heathrow spokesperson said: “Heathrow makes absolutely zero profit from these services. The price is calculated purely to cover the cost of operating and maintaining the infrastructure that supports them.”
Heathrow passenger numbers collapsed by 73 per cent to 22.1m last year, as the coronavirus crisis forced countries to close their borders and England went into its first national lockdown.
More than half of those passengers travelled in January and February last year — before the pandemic began to make its mark on the UK. By April 2020, passengers had fallen to only three per cent of 2019 levels.
The UK’s major aviation hub is hoping for passenger numbers to increase dramatically from 17 May when the government has said international travel could resume.
However, the exact details around the resumption of air travel will only be known after the government’s travel taskforce deliberates on what Covid measures will need to be taken by airports and airlines.
The EU collectively agreed earlier this week that people will need to have proof of having the Covid vaccine to travel to the continent.
https://www.cityam.com/heathrows-new-pandemic-tax-pushes-up-flight-prices/
Also the Times at
https://www.thetimes.co.uk/article/heathrow-cashes-in-with-pandemic-tax-whlxcw8m0
See earlier:
Heathrow may be able to persuade the CAA to let it get back some money, in higher charges, due to huge Covid losses
The Civil Aviation Authority has been considering whether to allow Heathrow to increase its airport charges, in order to recoup the £2.8 billion that it says it had lost due to Covid (a few months ago). The CAA had rejected Heathrow’s revised request to hike charges by £2.8bn, labelling it “disproportionate”. But it now concedes that there has been “a further material deterioration in the outlook for the aviation industry” – due to further Covid travel restrictions – since it launched a consultation on the rises in October 2020. CAA director Paul Smith said: “In these exceptional circumstances we are persuaded that there are real issues we need to address to protect Heathrow’s consumers. However, in our view Heathrow’s proposals are not in the best interests of consumers.” Heathrow has been threatening legal action against the CAA. The airport already has over £15bn of debts. The CAA has added two new options, for the H7 period, which starts on 1 January 2022, and will consult on them until 5th March. They are: Package 1 No intervention before H7, but consider interventions at H7 and Package 2 Targeted intervention now and consider further intervention at H7. The largest airline at Heathrow, IAG, has always opposed the CAA allowing higher charges.
Click here to view full story…
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CAA likely to prevent Heathrow increasing its airport charges to cover Covid losses of £1.7bn
Heathrow wanted to increase charges to compensate for the economic fallout of the coronavirus pandemic. But its regulators, the CAA, have rejected its request to increase airport charges by £1.7bn to Covid losses. The CAA said Heathrow’s demands were not “proportionate”. Heathrow operates under a regulatory mechanism that allows it to increase airport charges based on the costs it incurs, but this has to be agreed by the CAA. Separately, Heathrow is waiting on a final decision from the CAA on whether it can recharge airlines £500m for costs it has built up, prematurely, in (unwise)preparation for the building of a 3rd runway – even before all legal and planning hurdles were overcome. Heathrow said revenue losses in 2020 and 2021 would be more than £2.2bn – ie. the £1.7billion + the £500 million. The CAA now has a consultation (ends 5th Nov) on Heathrow’s request for RAB adjustment. IAG, said “Heathrow is a wealthy, privately owned company which should seek funds from its shareholders as many other businesses in our industry have done to weather this pandemic. We look forward to participating in the CAA’s consultation process.”
Click here to view full story…
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