Fees to rise at London’s Heathrow and Gatwick airports

Britain’s aviation regulator is allowing increases of more than 20 percent in fees charged to passengers at Heathrow and Gatwick airports, it announced Tuesday.

The Civil Aviation Authority said higher fees are needed to pay for improvements at Britain’s two busiest airports, and for increased security.

British Airways accused the agency of caving in to pressure from the airport owner, BAA, a subsidiary of Grupo Ferrovial of Spain, but BAA complained that the settlement was insufficient.

BAA contended that the aviation authority did not recognized “the scale of the task we are embarked on, the pressures of handling such large infrastructure projects, the full cost of the increased security requirements, as well as the impact of the credit market turmoil.”

The Civil Aviation Authority said it would allow fees to rise 23.5 percent at Heathrow to the equivalent of $25.82 per passenger, effective April 1. At Gatwick it is allowing a 21 percent increase to the equivalent of $13.70 per passenger.

The fee is charged for each departure or arrival at the airport, and is typically added to the price of a ticket, the aviation authority said.

In the following four years, fees at Heathrow will increase by no more than retail price inflation, while Gatwick fees can go up by 2 points more per year than the inflation rate. The airports are the two busiest in Britain.

“These higher airport charges are essentially paying for the modernization of Heathrow and Gatwick, in terms of both facilities and service, for the direct benefit of the passenger,” the Civil Aviation Authority said.

At Heathrow, that includes paying for the new Terminal 5, which enters service this month, the building of a new East Terminal by 2013 and upgrading of existing facilities.

At Gatwick, there are plans for expanding terminal facilities and installing a new baggage system.

British Airways, the dominant carrier at Heathrow and the sole customer at Terminal 5, rejected that explanation and said the regulatory system had failed.

“These overly generous charges far exceed what is required to upgrade facilities across Heathrow through investment in infrastructure and improved service quality levels,” said Paul Ellis, British Airways general manager for airport policy and infrastructure.

“When BAA’s new owners, Ferrovial, bought them, the CAA said they would not be influenced by Ferrovial’s high debt levels,” Ellis added.

“In practice, they have ignored their own policy and caved in to intense pressure from BAA by setting excessive price increases. Heathrow passengers will pay, on average, 17 percent more than the Competition Commission recommended in September,” he added.