Britain's aviation regulator said today that Heathrow airport would be allowed to raise airline charges 23.5 per cent in the year starting April 1st.
The charges are bound to anger airlines, such as British Airways and Virgin Atlantic, that reacted angrily to the Civil Aviation Authority's (CAA) previous proposals in November, which they said rewarded Heathrow operator BAA for failure.
However BAA, which is owned by Spanish construction group Ferrovial, said the increase in charges still did not go far enough.
"The review does not recognise sufficiently: the scale of the task we are embarked on; the pressures of handling such large infrastructure projects; the full cost of the increased security requirements; as well as the impact of the credit market turmoil," BAA said.
Ferrovial is battling to refinance the debt it took on to acquire BAA.
The CAA said Heathrow would be allowed to charge £12.8 per passenger in 2008-2009, and increase this by no more than retail price inflation plus 7.5 per cent in the subsequent four years.
The CAA had proposed a price cap of £11.97 in November but said it was increasing this to take account of the need for additional investment and security.
The regulator set a price cap of £6.79 per passenger for London's Gatwick airport, which is also run by BAA, up from its previous proposal of £6.07.