London Heathrow airport operator has announced it inked a new deal on airport charges with major airlines serving the gateway which, subject to the UK Civil Aviation Authority (CAA) approval, will be valid through the end of 2021.
The new agreement, which the airport operator called "a landmark deal", has been under negotiations for the past several months.
The deal includes "hundreds of millions of pounds" worth of incentives for the airlines to boost their load factors on existing flights.
"Airlines at Heathrow currently operate with average load factors below the IATA global average. If airlines at Heathrow reached global averages for filling aircraft there is an opportunity to reduce passenger charges by 10-20% against what they might otherwise be, in addition to helping Heathrow meet the Government’s affordability target for expansion," the airport operator said.
The agreement will allow keeping the airport charges at close to 2016 levels in real terms through the end of 2021.
"This would allow all parties – from the regulator to airlines and the airport – to focus their resources on agreeing the regulatory settlement that will be in place during the main expansion works from 2022," Heathrow Airport added.
Just a day earlier, IAG International Airlines Group appealed to the British government to step in and cap the airport charges at Heathrow. The holding, which owns Heathrow's largest user British Airways (BA, London Heathrow), said that the London gateway was already "the most expensive hub airport worldwide".
Before the new agreement enters into force, the UK CAA will launch public consultations, expected to launch in the coming weeks.
According to the ch-aviation capacity module, British Airways has a 46.9% market share by capacity at Heathrow. The total market share of IAG, including Aer Lingus, Iberia, and Vueling Airlines, is 50.9%.
