How does a passenger end up with higher airfare prices, but an airline end up with less money on the sale? Bureaucracy and Heathrow lobbying are two accurate answers.
Airlines bring the world to London and London to the world, from the Beatles to Benedict Cumberbatch. When they arrive or depart, more often than not they arrive at Heathrow Airport.
The airport has benefited from decades of goodwill thanks to things like Love Actually and the many cultural British phenomena but is it an airport that actually commands love, or the highest per passenger fees charged in the world, actually?
Becoming synonymous with strikes, accessibility complaints and security lines which make getting into a stadium concert seem like an organized dream, I’d argue not. That hasn’t stopped Heathrow from trying to take its already record setting rip-off fees of £31.57 per passenger to £44.
That’s currently being dealt with, but it all seems a bit too friendly.
Heathrow’s Latest Attempted Passenger Rip-Off Somewhat Fails
Heathrow charges the highest per passenger fee in the world and that fee is added directly to every airline ticket you look at and book. Throw that in on top of the UK’s highest in the world per passenger fee for arrivals and departures and UK airlines don’t make as much as you thought.
On a £421 economy fare from London to New York, Virgin Atlantic takes in £223, with £200 of that £421 going to governments and airports. The actual fare for that flight is £0.50 each way (yes, 50 pence!), with a fuel surcharge of £220 round trip.
Back to Heathrow’s fees, the airport has been charging an already shocking £31.57, but Heathrow had hoped to bring the cost up to £44 per passenger, more than double the price of most global airports. So where did that wild number come from?
The answer is duplicitous, borderline insane and entirely self serving forecasting which the airport attempted to use to dupe passengers and government watchdogs.
Heathrow tried to pull one over on regulators by offering entirely unrealistic models of the air travel recovery in 2022. Basically, Heathrow wanted all airlines to pay more per passenger forever no matter what travel recovery came, based on a forecast that no air travel recovery would come any time soon.
Heathrow thought fewer passengers would give them a right to charge more per passenger to make up for lost revenue, as if we all owe Heathrow money forever no-matter-what. We all know how that worked out…
In response to the duplicitous shareholder cash grab the UK’s CAA mandated that Heathrow drop its prices to £25.43 until 2026. That figure was recently upheld. Still, that figure remains much higher than other airports — and for what?
If we were talking about Singapore Changi Airport, which provides a butterfly garden, truly local hawker stall food court, a trip worthy water fixture “The Jewel”, a big movie theatre and an absolutely refined airport passenger experience, I’d be willing to hear the pitch. We’re not.
We’re talking about an airport that leaves wheelchair passengers waiting for up to hours at a time, that never properly staffs security lanes and offers an aesthetic which makes many hospitals look upscale. What airlines have managed to achieve with their own lounge spaces and bespoke check in areas is in spite of Heathrow, not because of it.
Heathrow has taken decades of record profit and returned it not to the passenger experience and toward making Heathrow a sought after global hub, but to its foreign investors including the Chinese and Qatari Government wealth vehicles via dividends.
Current pricing already makes it harder for UK airlines to compete on price globally due to the extortionate fees charged, and London Heathrow is often cited as one of the worst passenger experiences in the western world, which actually makes it harder for airlines based in the UK to do business.
Passenger Charges Capped Until 2026, But…
The UK’s Civil Aviation body, the CAA, stepped in and averted the worst potential case of ticket prices going up by a minimum of £13 per person earlier in the year in the new proposals. It was an important first move.
A decision from the competition and markets authority the CMA has now upheld that CAA price cap which will see Heathrow modestly drop fees until 2026 to £25.43. But did Heathrow still win?
If you ask airlines, or anyone who regularly flies through Heathrow though, that figure is still not an outright passenger win. Heathrow has a captive market and has not acted in good faith with investments for passenger experiences or airlines tech.
There’s no number which can change fundamentally bad corporate actors and if fees are to remain high, demands should be attached to them. The airport has raised other fees on airlines making an increasingly hostile environment.
With the unrelenting global popularity of London and the unprecedented number of travelers flying through, there are plenty of cases to make as to why the price should have gone much lower, particularly in lieu of demand for standards.
It seems that Heathrow worked to throw out a truly ridiculous first number so that it could retain high fees, with everyone feeling as if they got a win. Everyone, except the passengers who actually fly through Heathrow.