British Airways and Heathrow Airport are challenging the UK Civil Aviation Authority’s ruling that the London hub should cut its landing fees from next year.
The airport and airline both launched appeals against the regulator’s decision, along with Delta Airlines and Virgin Atlantic, saying it will “undermine investment” and lead to at least £1.5bn in extra passenger charges.
The CAA said last month that charges will be fixed at £31.57 per passenger in nominal prices for this year, up from £30.19 last summer, then fall around 20% to £25.43 per passenger in 2024 and will remain broadly flat at that level until the end of 2026.
These charges are generally passed to customers through airline ticket prices.
BA, which with more than half the slots is the largest holder of take-off and landing slots at the airport, said the overall effect would be an increase in charges, meaning it would be "materially affected" by the increase.
The airlines said the average airport charges payable per passenger by BA, Virgin Atlantic and Delta customers would increase to an average of £23.22 per passenger, from £19.95.
In its appeal, the airline, which is part of International Consolidated Airlines Group SA (LSE:IAG), said it has identified "errors" resulting in an extra £513mln in passenger charges, with a cumulative "materiality" of around £1.5bn over the five-year regulatory period, it argued.
It said errors included setting the passenger forecast too low, failing to review or reduce a £300mln upward adjustment to the regulated asset base of Heathrow, and errors in setting the weighted average cost of capital for the period too high.
Vigin Atlantic is the second largest individual holder of slots at Heathrow, with more than 40 aircraft and 19,000 flights carrying around 4mln passengers in 2022.