Heathrow Airport warned there will be extra pressure on its cashflow after being told it can only charge £30.19 per passenger until at least next summer by the UK aviation watchdog this morning.
The Civil Aviation Authority (CAA) made the interim decision as current price controls expire at the end of December. A final decision and licence modifications for a new five-year control period, known as H7, will be made in and come into effect in the summer of 2022.
The CAA said it is introducing this interim measure to "protect the interests of consumers" until the H7 licence modifications take effect.
The CAA had examined a range of airport charges from £24.50 to £34.40 per passenger for the H7 period.
It said the £29.50 charge "is in line with our consultation and reflects the uncertainty of the recovery of passenger volumes at the airport from the pandemic, particularly following the emergence of new information about the omicron variant of Covid-19 since the end of the consultation period".
The charge will be adjusted from 2020 prices to 2022 prices to adjust for inflation, which leads to a charge of £30.19.
A Heathrow spokesperson said the airport was "extremely disappointed" in the interim decision and that it "relies on rushed analysis" and "will undermine passenger experience".
The spokesperson added: "As an example, the CAA's flawed analysis assumes that operating costs at Heathrow next year will be £173m lower than our budget. This is even lower than we were able to achieve in 2020, when we served half as many passengers with only one runway and two terminals operating and the benefit of a government furlough scheme. There are material and basic errors in many aspects of the CAA's assessment.
"Uncorrected, this risks leaving Heathrow without sufficient cashflow to support investment in improving passenger service and resilience."
Heathrow's main customers are International Consolidated Airlines Group (LSE:IAG)'s British Airways, with almost half its slots, followed by Lufthansa at 5%, Virgin Atlantic at just over 3%, Aer Lingus, American Airlines Group (NASDAQ:AAL) and United Airlines Holdings Inc (NASDAQ:UAL).