Heathrow wants higher passenger fee amid surge in air travel

London’s Heathrow Airport is seeking higher passenger charges to meet rising costs and let it expand services as airlines ramp up operations in the post-pandemic era, Chief Executive Officer John Holland-Kaye said.

Passengers flying through the UK’s busiest airport tripled to 62 million in 2022 as countries lifted restrictions, the company said while reporting results. Losses narrowed to £684 million ($822 million) in 2022, nearly half of previous year, due to inflation and higher charges.      

“You can see here that a business that is economically regulated is still loss making while the airlines are returning to profits and dividends,” Holland-Kaye said in an interview. 

Britain’s aviation regulator has delayed a decision on fee hikes as it evaluates how a UK recession and rising interest rates impact travel demand. The airline industry is set to achieve its first post-pandemic profit this year, with carriers likely making a collective $4.7 billion in net income in 2023, the International Air Transport Association said in December.

An interim charge of £31.57 ($38) per passenger starting February through the rest of 2023 was announced in December, pending a final ruling on a five-year charging structure. It has been opposed by all the major airlines. 

The airport will not have a cap on passengers in place for the busy summer travel season as it stepped up employment in the past 18 months to handle the surge in air travel. Heathrow was particularly hit last year after a shortage of workers forced it to curtail operations when arrivals surged.