Business

Heathrow to cut domestic charges by a third

Heathrow Image copyright Getty Images
Image caption Heathrow plans to cut the fees it charges airlines for domestic and European passengers

Heathrow airport plans to cut the fee it charges airlines for passengers travelling to other UK destinations by a third from next year.

The move would reduce the charge from £29.59 to £19.59 in a bid to boost regional connections to Britain's busiest airport.

The airport is also proposing raising environmental charges to encourage cleaner, quieter planes.

Heathrow serves just seven regional destinations, down from 18 in 1990.

Charges for passengers flying to European destinations will also be cut by £5 to £24.59.

The airport hoped the reductions, which would take effect on 1 January, would encourage fuller planes and make more efficient use of limited capacity.

Airlines are not obliged to pass on the savings to passengers but it is expected that many would.

John Holland-Kaye, chief executive of Heathrow, said: "Our proposal to cut passenger charges by a third for domestic services will help us continue to drive the tourism, exports, inbound tourism and foreign direct investment that supports economic growth across the whole of the UK."

New domestic destinations

The review of charges is part of the airport's attempt to keep existing domestic routes commercially attractive to airlines and meet the recommendations of the National Connectivity Taskforce.

Last month, the airport pledged to open more routes to domestic destinations if it is allowed to expand and build a third runway. New routes could include Humberside, Newquay and Liverpool.

Image copyright Getty Images
Image caption Edinburgh is one of the few regional airports to remain connected with Heathrow

According to Heathrow, 1.7 million passengers connecting with long-haul flights in Amsterdam, Frankfurt, Paris or Dubai could potentially be persuaded do so through the London airport if charges were reduced.

It also plans to alter the minimum departure charge for all flights, which currently stands at £1,406.

The proposals mean that airlines would have to pay a minimum of £1,268.40 per flight, £1,592.15 for EU flights and £2,689.82 for non-EU destinations.

Heathrow reviews its charging structure every five years. The final schedule will be announced in August.


Analysis: Douglas Fraser, BBC Scotland business and economy editor

Heathrow's bosses concede that they've lost ground in short-haul UK and European flights, while the scarcity of landing slots has pushed airlines to use them for more lucrative long-haul flights.

In the past 25 years, Heathrow's UK and Crown Dependency links are down from 18 destinations to only seven. Other London airports and rail offer alternatives, but that can be inconvenient for outbound passengers, and a blockage for inbound travellers who might otherwise visit other parts of the UK.

While Northern Irish links with London are almost all by plane, 69% of travellers between Scotland and London go by air. Yet there is no Heathrow link to Inverness.

Only BA links Heathrow to Glasgow, and Little Red, part of Virgin Atlantic, is to ground its links to Edinburgh and Aberdeen in September, leaving British Airways without competition. Meanwhile, smaller airports are closing or need government support without London links, including Blackpool, Newquay, Plymouth, Prestwick and Dundee.

The new charging regime, if implemented, would provide a financial signal to help maintain the shorter spokes in to the Heathrow hub. It would also help Heathrow's argument that it is good for the UK as a whole, as it fights for permission to build another runway.


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