International Airlines Group (IAG), the owner of British Airways, Iberia and Aer Lingus, has urged the UK Civil Aviation Authority (CAA) to negotiate a cut in passenger charges with London’s Heathrow Airport.

The IAG request comes after Heathrow paid another £500m in dividends to the airport’s foreign investors. The amount is collected from passengers flying from the airport and makes Heathrow one of the costliest airports in the world, IAG said.

If the UK’s aviation regulator can negotiate a cap on the fees with Heathrow, the airport will give airlines discount on passenger-related charges, which will be ultimately passed on to travellers, making their journeys cost-effective.

In a statement, an IAG spokesman said: “Britain needs cost-effective airport infrastructure that boosts the UK’s competitiveness, not just the airport’s shareholders.

Covid-19 Report — Updated twice a week Understanding the Covid-19 outbreak, the economic impact and implications for specific sectors

Covid-19 executive briefing report cover
GlobalData

Our parent business intelligence company

“Heathrow is already the most expensive hub airport worldwide and the government must protect consumers by putting a cap on what they pay to use it.”

“It is private investment that has transformed Heathrow into what it is today, providing IAG with some of its most profitable routes.”

However, a Heathrow spokesman said that the airport has already cut passenger charges in 2018. He added: “It is private investment that has transformed Heathrow into what it is today, providing IAG with some of its most profitable routes.

“It is right that our shareholders receive returns in record years and it will ensure we expand whilst keeping airport charges close to 2016 levels.”

How optimistic are you about your company’s growth prospects?

View Results

Loading ... Loading ...

Heathrow’s single largest investor is Spanish airport operator Ferrovial. Other shareholders include Singapore’s GIC, the Qatar Investment Authority, and the China Investment Corporation.

The airlines also fear that the third runway planned at Heathrow could lead to higher passenger charges.

The CAA has been authorised by the government to check Heathrow’s spending and agree on the new passenger charges. The government had earlier said that Heathrow should keep charges ‘close to today’s level’.