31 October 2010
Heathrow Airport is to overhaul its airline charges to penalise carriers flying older aircraft with empty seats in an effort to attract business from Paris and Frankfurt airports. Airport operator BAA Ltd will put up the minimum departure fee airlines pay from £220 to £1,000. It will also raise its charges on airlines for passengers flying between UK cities from about £13 to £20, but reduce fees by 25% for passengers who arrive on one aircraft and leave on another within 24 hours. A fee will also be brought in for airlines’ transit passengers who arrive and leave on the same aircraft.

The way landing charges are calculated will change so the proportion based on nitrogen oxide emissions will rise from 10 to 15%. Airlines flying quieter aircraft will get further discounts. British Airways, Heathrow’s biggest user with more than 40% of aircraft movements has broadly supported the changes and Heathrow’s aim to boost passenger numbers but had some concerns about the higher charges for its domestic fliers.

The move by BAA Ltd to review the charges has been under discussion with airlines since January 2010 and is due to be implemented in April 2011. BAA says the new charges will not change the revenue it gets from Heathrow airline levies, which is now about £1.04 billion. These levies make up about half of Heathrow’s total revenues, the rest coming from retail, parking, rail and property sources.

The new charges will mean that carriers such as Japan’s All Nippon Airlines – launch customer for Boeing’s lightweight, fuel-efficient 787 Dreamliner aircraft – will pay proportionally less than those with older aircraft such as the MD-80.

Departure charges are based on the number of passengers aboard, and the current minimum is £220. The 25% discount on transfer passenger charges is intended to boost Heathrow’s competitive standing with other European airports and encourage the opening of new routes.

Currently, there are no direct flights from Heathrow to Vietnam, Lima or Jakarta and passengers have to connect in cities such as Paris or Frankfurt. By making transfer passenger charges cheaper, Heathrow hopes to gain more routes to and from emerging markets than European rivals.