Heathrow says fee cap risks driving away investors

[LONDON] Heathrow Airport said that proposals capping fees at Europe's busiest travel hub risk driving away investors, even as airlines led by British Airways argue that passengers will desert the hub because of the impact on fares.

Heathrow should be allowed to lift charges by no more than the rate of inflation as determined by the UK's retail price index in the five years from next April, down from RPI plus 7.5 per cent previously, the Civil Aviation Authority said on Thursday. Airlines had sought a 9.8 per cent annual reduction, it said.

The regulator sets the maximum amount that London's top airports - Heathrow, Gatwick and Stansted - can charge airlines to use their facilities. While fees drive up ticket prices, they also underpin investment such as a £3 billion (S$6 billion) spending plan intended to allow Heathrow to keep pace with rival hubs Paris Charles de Gaulle and Frankfurt.