Heathrow airport will reportedly put forward two plans for building a third runway this week, both of which could result in an increase of up to 25 per cent in passenger charges.
The revelation comes as the airport prepares to hand over a business plan to the Civil Aviation Authority (CAA), which will contain two different scenarios for expansion, according to a report by The Times.
Under the first scenario, the third runway would be built quickly with development kept simple. This option would see passenger charges rising 9.5 per cent from £23.92 currently to £26.20 per passenger.
The second option would take more time and prioritise better services for passengers, such as railway access to the airport, but this would increase charges by 25 per cent, adding £5.99.
Passenger charges at Heathrow are already among the most expensive in the world, and the airport has so far pledged to keep them relatively flat throughout the expansion process. It even claimed that it had reached an agreement with its airline customers to reduce the fees earlier this year.
The charges are paid by airlines, which are then left to decide how much of the fee to pass on to passengers in the form of higher ticket prices.
Despite fees increasing in either scenario, Heathrow CEO John Holland-Kaye told the Financial Times that the increase in charges is “insignificant” and insisted that consumers would see ticket prices fall anyway due to the rise in airline competition created by extra capacity.
The revelation comes after the CAA denied Heathrow’s request to increase initial spending from £650 million to £2.4 billion before it is even given planning permission to build the third runway, forcing the airport to push back its timeline for completing the project by at least 12 months.
Commenting on the CAA’s decision, International Airlines Group (IAG) chief executive Willie Walsh, who has long criticised the airport on costs associated with the project despite being the hub’s biggest customer, said: “An independent study would ensure Heathrow expansion is cost-effective and stop the CAA, as regulator, allowing consumers to be taken for a ride. To ask customers to stump up vast sums in advance for a runway that may not get built, based only on Heathrow’s cost proposals, is unacceptable.”