Airport charges and passenger volumes
Heathrow Airport is subject to the Airport Charges Regulation 2011, which was transposed into UK law from a European Directive for its member states. This regulation aims to ensure a common framework for regulating airport charges, which includes consultation and transparency of information when setting airport charges.
The level of airport charges is set each year in accordance to the CAA’s pricing formula, which is part of the CAA’s decision on Airport Regulation of Heathrow and Gatwick Airports 2008-2013.
The formula set by the CAA determines the level Heathrow cannot exceed in charging its airline on a per passenger basis (passenger only), which is also referred to as the “maximum allowable yield”. The maximum allowable yield is set following a period of formal consultation with the Heathrow airline community, with prices effective from 1st April each year.
The CAA formula for the maximum allowable yield is calculated by taking the following into account;
|Retail Price Index||=||August RPI is used|
|Value of X||=||Fixed at 7.5%|
|Capital triggers||=||reduction in the maximum allowable yield when the airport
has not achieved particular capital investment project milestones
|Bonus||=||airport can earn a bonus if it exceeds targets for certain service quality measures|
|Correction factor||=||corrects for any under/over recovery of actual airport
charges against the maximum allowable yield
The maximum allowable yield is then converted into an estimated total revenue that Heathrow can recover. This is estimated by using a forecast for total passengers (i.e. maximum allowable yield multiplied by total passenger numbers).
The total revenue from airport charges is then recovered from Heathrow’s structure of airport charges.
The structure of airport charges has been subject to formal consultation with the Heathrow airline community and has resulted in the total airport charges revenue being recovered through three categories; Landing Charges, Departing Passenger Charges and Aircraft Parking Charges. The three categories (excluding ANS) represent 21%, 75% and 4% of the total airport charges revenue respectively.
Heathrow’s structure of airport charges is designed to support its shared vision “to be a world class airport – the UK’s direct connection to the World and Europe’s hub of choice by making every journey better”. The structure of airport charges encourages most efficient use of airport scarce resource, supports the “hub” status and promotes environmentally responsible behaviours.
The Conditions of Use document details the term and conditions that apply to users for using Heathrow’s facilities and services.
Airport charges are levied on a per passenger basis, for more information about passengers, please see Heathrow Traffic Statistics.
Further details on tariffs for airport charges, previous consultations and Conditions of Use can be found at www.heathrowairport.com/cou