Airport bosses suggest lower charge

Heathrow AirportBosses at Heathrow have submitted a new, lower figure for the amount they should be allowed to charge airlines for using the west London airport from 2014 to 2019.

But the reduced figure, which will have an effect on air fares, is still much higher than that proposed by the Civil Aviation Authority (CAA) which will have the final say on the matter.

Airport chiefs announced the revised figure as they published the results of a survey of 1,178 Heathrow passengers. This suggests that passengers would rather have better services than see investment at Heathrow cut back and air fares kept down.

Heathrow said the survey shows that passengers are willing to pay more than four times the increase bosses are proposing.

Under its alternative business plan, Heathrow's charges to airlines are the equivalent of an annual increase in charges to passengers of the RPI inflation rate plus 4.6%, compared with the original plan which would see passenger charges rising by RPI plus 5.9%.

The new figure would mean air fares go up by £1 per ticket per year, with charges making up just 5% of the average ticket price, Heathrow said. But the CAA, which will make its final ruling on Heathrow charges in January, has initially proposed that the increase in passenger charges at Heathrow for 2014-19 should be capped at RPI minus 1.3%.

Heathrow said it was able to submit a lower figure by increasing operational savings from £248 million to £427 million and by proposing a lower rate of return for shareholders.

Heathrow chief executive Colin Matthews said: "Investors can choose to put their money anywhere in the global marketplace. The CAA's current proposals will make it impossible to persuade them to put anything other than the bare minimum of capital into Heathrow.

"We know airlines want the improvements that we're proposing and we have done everything possible to keep the cost of those improvements to an absolute minimum. The CAA has a duty to act in passengers' interests. Today we're making clear that passengers want these improvements, and are prepared to pay for them."

Heathrow's announcement follows the airport's bosses' plans last week which revealed three options for a third, extra, runway at the airport.