Save, make, understand money

Household Bills

Take off or rip off? Higher air fares on the way

Take off or rip off? Higher air fares on the way
Emma Lunn
Written By:
Emma Lunn

Air fares are set to increase after the Civil Aviation Authority (CAA) set out plans to up the amount airlines pay towards air traffic control – despite a major outage in August.

The CAA has set out its new price control arrangements for the air traffic control operator, called NERL (NATS En Route Limited).

The new pricing means each plane will have to pay a contribution of £64 per aircraft, £17 more than the current figure of £47. The CAA estimates that this will mean the cost per passenger will rise by about 43p.

The air traffic control operator said more money was needed to recoup money lost in Covid-19 and to invest in high quality service after August’s air traffic control fault.

The August Bank Holiday weekend saw hundreds of flights to and from the UK cancelled after technical issues sent UK air traffic control into meltdown.

Andrew Walker, chief economist at the CAA, said: “Our decision will provide the resources and investment required for NERL to provide a resilient, high-quality service for passengers and modernise its services, while recovering costs from the pandemic, which is consistent with the traffic risk sharing arrangements in NERL’s licence at the time.

“Overall, the price control should ensure that NERL provides an efficient service and value for money. Implementing targets around performance, efficiency and environmental impact will help deliver an improved airspace system that will benefit everyone.

“We also recognise the disruption caused by the technical issue in August and we will consider any further regulatory steps as appropriate following the outcome of the Independent Review.”

Airlines unhappy

Airlines reacted angrily to the CAA announcement and warned that passengers will face higher fares as a result of the decision.

Tim Alderslade, chief executive of industry body Airlines UK, told the BBC: “It is clear that a wider independent review into how Nats is regulated is needed to protect passengers and ensure that airlines are not always forced to act as the insurer of last resort and bear millions of pounds of costs for failures that are not their fault.”

Although airlines were not to blame for the issues in August, they had to foot the cost of accommodation for stranded customers and extra flights for customers stuck overseas.