Heathrow has been at the centre of a blazing row this week in the travel world. The airport’s main customer, British Airways has described it as ‘over-priced, over-rewarded and inefficient’. The words were spoken by Willie Walsh, CEO of BA parent company IAG who operate half the flights out of the airport.
The row was started when the Civil Aviation Authority outlined new proposals for how much the airport can charge companies to run flights from its runways. The current system sees Heathrow take a hefty slice of any flight revenue as payment.
A £60 flight to Bilbao would see the airport take a £28.30 fee. A further £13 would go to the government as taxes. On some longer BA flights the airport takes two fifths of the cost of some of the standard tickets. Perhaps it is not surprising that the airline has aimed its attack at Heathrow.
One of the main reasons the row erupted is because Heathrow is charging so much more than its rivals. Gatwick operates on a £12.27 fee for all international flights, a significant difference to the fees at Heathrow. The argument runs that the service and facilities you get at Gatwick are broadly similar to those at Heathrow so exactly where is your money going?
The reason for the difference comes from the fact the charges are arrived at by an unusual backwards working method. An estimated rate of return is chosen by the airport and then divided by the number of passengers.How many businesses could get away with that in the long term? Which is why BA are so upset, as are many other airline companies.
If things were to change, however, it remains to be seen if the airlines would pass on the savings to the customer. However, for once, passengers and airlines are in agreement about the cost of travel. It’s a good thing you can still get some great deals on travel insurance.
Date Created: 08/05/2013