jreichel

It is applicable to all airlines. Here's the beginning of the full descriptive text:

*1 DEFINITION-
EFF DATE-05FEB2021 - DISC DATE-
.
THE EXCEPTIONAL REGULATORY CHARGE IS COLLECTED TO
MANAGE THE UNDER-RECOVERY OF OTHER REGULATED
CHARGES -ORC-.
.
.................................................. .............
*2 APPLICABLE TO-
EFF DATE-05FEB2021 - DISC DATE-
.
APPLICABILITY EXAMPLES
.
DOMESTIC DEPARTURE
.
1.LHR-MAN- GBP 8.90 APPLICABLE FOR DEPARTURE FROM
LHR

oliver2002

Since this is nothing particular to LH and M&M, I'll move this to the UK section of FT.

Regards Oliver2002
Mod LH|M&M

bobhope2

Thanks Oliver.

I had just assumed it was another nefarious scheme by LH/LX

southlondonphil

Nope, just another nefarious scheme by LHR

UKtravelbear

Depends on the charging and regulatory regime of the airport

Airports cost money to run and improve so they want cash to do that and it has to come from somewhere

LHR and LGW for example charge in two separate streams - the landing charge and the individual passenger service fee. They could abolish the latter overnight but just increase the landing fees instead

In other parts of the world there are no passenger fees for using the airport because they just lump them into the landing fee so they appear to passengers as being 'free' but it's just an illusion.

1P

Another thread discusses this here: United Kingdom Exceptional Regulatory Charge (R1)

stut

Now merged into this one, so please feel free to continue the discussion here.

stut
Moderator
UK & Ireland

Often1

Nothing is "free." It is simply included or not.

The costs of building and maintaining airports fall on someone. That could be a national government which simply funds these costs out of a national spend and is thus funded by taxpayers overall, it could be funded by carriers or passengers or some combination.

The APD experience is instructive. All the predictions of gloom to the contrary, not one whit of empirical marketing evidence that it has negatively impacted UK travel, LHR most particularly.

:D!

These privately-collected "taxes" only really impact redemption tickets. Otherwise airlines have to include them in the advertised price.

But I do take the point that when the base fare is close to 0 an extra £9 will be a substantial proportion of the additional costs, so the minimum price for an ex-LHR short haul is now going to be something like £50 instead of £40.

On the other hand, BA pays the "taxes" on short-haul redemptions so either changes to the RFS flat fee are coming or BA will choose to suck it up on these tickets.

momoflyingguy

https://www.heathrow.com/content/dam...ce_Tariffs.pdf

top of page 6

13901

£8.90 a passenger for Baggage, PRS & CUTE? I feel it's more to pay for the billion and change that HAL wants to spend on T2's baggage system...

life form

Questionable idea on part of LHR if you ask me.

Obv, people flying through LHR right now won't care about an extra 10 or 20 quid. However, given traffic this winter is likely below 1 m pax per month, not that much money coming around from this, right?

And as soon as discretionary bookings are picking up, you'd obv want to stimulate demand rather than depress it through higher prices. I think they will have to eliminate this in a matter of months. Why give pax a reason to route their long-haul eco trip through CDG, AMS, or FRA? Just for 2 x GBP 8.90? Don't they stand to earn more if a pax elects to connect in LHR?

HeyUpDuck

My experience of routing through AMS/CDG is that tickets are more expensive than routing through LHR, even after the additional £8.90 surcharge. LH/LX with stopovers at FRA/MUN/ZUR are insanely cheap regardless so LHR may lose out there but not against AMS/CDG.

UKtravelbear

and important to note

“This charge has been introduced at the request if the airlines ...”

and can we call it a charge (which it is) and not a tax because it’s neither government imposed or for governments benefit,

Freddorick

So basically LHR is taking revenue from BA assuming that BA does not have sufficient pricing power to pass the 8.90 to consumers. This holds especially on connecting tickets and everywhere where BA faces strong competition from other London Airports (e.g. ZRH-XXX-JFK, or LON-GLA).

On routes where BA has more pricing power or other airlines are equally affected e.g. LON-MEX direct I would expect ticket prices to increase.

LHR acts like a typical monopolist in this situation. While there are other airports it would be a) very costly for BA to shift operations, and b) other airports have insufficient capacity.

This is somewhat a consequence of the third LHR runway. If LGW would have gotten a second runway and some terminal expansion instead BA could make a much more credible threat to move a chunk of flights to LGW, similar to how LH plays FRA vs MUC.

In the end this levy moves money from BA and the flying public to LHR, which is the rational reaction of LHR.

Generally, I think monopolies should be regulated in some way. This holds especially if they operate
in an area with lots of political involvement. It seems ironic that the government has to lend BA money to
survive which is then partially siphoned into the pockets of the shareholders of LHR.

Finally, this levy is great news for LGW. I would expect BA to move leisure and lower yielding routes there as a reaction to this.