A mysterious new tax is being added to all flights booked from London Heathrow. It started on Friday.
You will see it on your taxes breakdown as R1. Here is an example on an Economy flight from London to Rome:
The description for the charge says:
“THE EXCEPTIONAL REGULATORY CHARGE IS COLLECTED TO MANAGE THE UNDER-RECOVERY OF OTHER REGULATED CHARGES”
It appears to be £8.90 irrespective of whether you are flying short-haul or long-haul.
It applies to all airlines flying from Heathrow, but only from Heathrow. It is not added to inbound flights.
It is not linked to the standard ‘Passenger Service Charge’ or ‘Air Passenger Duty’, which continue to be charged at standard rates as the screenshot above shows.
This may be linked to Heathrow’s demand to have its covid losses repaid by passengers (see our other story today) but it seems unlikely as this requires authorisation by the Civil Aviation Authority.
We will update this article when we get a proper answer. Whatever the answer is, your next flight just got £8.90 more expensive.
Whilst existing ticket holders will not be asked for any additional money, British Airways may ask you to pay it if you make a change to an existing booking.
PS. We now have the answer, which is on page 6 of this document.
Put simply, Heathrow’s agreement with the airlines guarantees that they, and not the airport, will pay 100% of certain airport costs. With sharply reduced passenger numbers, the fees paid by airlines have not been high enough to cover these costs.
The £8.90 surcharge covers the loss Heathrow made in 2020 on providing certain services, as well as its estimate of on-going losses. The surcharge will, in theory, disappear when passenger volumes return to normal and the backlog of underpayments has been cleared.
Heathrow told us in a statement:
“Heathrow provides key airport services like the baggage system, colleague car parks, airline check-in desks and utilities for our partners to use. The fee to use these services is calculated purely to cover the cost of providing them – Heathrow makes absolutely zero profit from these services. To ensure this remains the case, the fee is closely monitored by the CAA, as well as being scrutinised and agreed with airport users annually – as was the case with this year’s charge. The cost per passenger to cover these services naturally fluctuates depending on the number of passengers using the airport.”