business news

CAA rejects Heathrow’s request to hike up in airport charges by 10%

CAA rejects Heathrow’s request to hike up in airport charges by 10%
CAA rejects Heathrow’s request to hike up in airport charges by 10%

The Civil Aviation Authority has reportedly rejected a disproportionate funding request from Heathrow, which would have led to an escalation of 10 per cent in airport charges. Heathrow is trying to offset losses that it incurred due to the pandemic, cite sources close to the matter.

The CAA has instead sanctioned a smaller surge that will enable Heathrow to finance the reopening of terminals as there appears to be a recovery in air traffic. The authority is responsible for the regulation of what Heathrow can charge users, including airlines. Those airlines can then opt for passing on these charges to their passengers.

According to Willie Walsh, the Director of IATA, the Civil Aviation Authority had “caved to pressure from Heathrow” and stated that customers will end up paying millions more for travel. Walsh further stated that this is the time when everyone in the aviation industry should be pulling together for the reduction of costs and rebuilding a significant sector of the economy. Furthermore, airlines should not be looking for covering losses on the tab of its consumers.

Walsh also added that regardless of IATA’s next steps towards countering the damage of this move, the agency does agree with the CAA’s finding that Heathrow must make investments in better services for travelers and airlines.

According to Heathrow, the CAA had recognized the requirement for action to support its business, however had “failed to deliver”. It further stated that this would undermine the confidence of investors in UK regulated enterprises, and put the infrastructure agenda of the government at risk.

In the opinion of IAG, the owner of British Airways, it was extremely disappointed with the decision of the CAA for granting even a smaller rise which it said will unfairly penalize customers. After Brexit, this will drive traffic to other airports and will make the United Kingdom even less competitive, added IAG, stating that it is assessing the alternatives.

Source credit: https://www.bbc.co.uk/news/business-56900855

About the author

Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.